4 Steps to Avoid Foreclosure

Amid the North Shore’s stately homes with perfectly trimmed lawns, it’s an unwelcome intruder.

It’s the foreclosure crisis, and it’s getting worse. “What we’re seeing is that the number of foreclosures is rising,” says Scott Krone, principal of development with CODA, LLC., a construction management firm in Wilmette.

Here are four helpful steps you can take to prevent foreclosure.

1. Contact your bank:
If you’re having trouble making your monthly mortgage payment, let your bank know. One of the biggest myths, says Harris spokesman Jim Kappel, is that banks want your home. “We’re not real estate property managers, we’re lenders,” says Kappel.

When you call, it’s important to do more than just leave a message on a machine. “Connect with a real person at your bank and talk to them,” says Denise Anderson, who leads the loan modification team at Harris in Rolling Meadows. Since the team formed two years ago, they’ve fielded about 10,000 calls and 2,000 applications for loan modifications.

Harris can also help homeowners by rolling missed payments on the back end of a loan, offering a temporary forbearance, or negotiating a short sale–selling your house for less than it’s worth.

2. Seek out the advice of a housing counselor:
In the rush of a financial crisis, it’s easy to make rash decisions. But you have time: In Illinois, the foreclosure process takes between 12 months and two years, says Jasmine Brewer, director of housing counseling at the Interfaith Housing Center of the Northern Suburbs in Winnetka.

Take that time to talk with a not-for-profit housing counselor such as Brewer. Also, make sure they are certified by the Department of Housing and Urban and Development. They’ll educate you about your options, from filing for a temporary forbearance with your bank to referring you to a new lender willing to modify the terms of your loan.

3. Consider home-sharing:
One of the more creative solutions to avoid foreclosure, says Brewer, is home-sharing. Each year, Interfaith Housing Center matches homeowners looking to alleviate burdensome mortgage payments with renters looking for affordable housing. The benefits include saving money, enjoying companionship and feeling secure.

4. Go on the offense with foreclosure defense:
When his dad was on the brink of losing his home to foreclosure, Adam Ackerman knew he had to help find a solution. “I’m not going to let my parents lose their home,” the Rosemont resident recalls thinking.

So he did some research, and came up with an idea to help attorneys market their services to homeowners in danger of foreclosure. His efforts helped his father save his house, and resulted in Foreclosure Defense, a business he launched in October 2009.

How does it work? After a free consultation, you’re connected with an attorney who works for a discounted monthly retainer.  They sue banks for counter claims such as predatory lending. For less than you pay on their mortgage each month, you can buy up to two years of extra time, Ackerman says.

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