Communication is Key to Avoiding Foreclosure When Refinancing is Not an Option

By Gabriel Traverso
Local Lender Columnist
Aug 27, 2007
Refinancing is often one of the best ways to get out of trouble and avoid foreclosure, especially if you have an adjustable-rate mortgage or an interest-only loan. At some point these mortgages must be refinanced if you can't afford the rising payments. However, if you're worried about foreclosure and can't refinance, what are your options?

Mortgage Refinancing

In order for refinancing to be a solution you must have equity in your Dallas home. While many Texas markets are still performing strongly, Dallas is suffering a bit from the housing market slump and 1st quarter home prices have decreased 0.6%. While this is certainly not as bad as some markets, it could still hurt your chances of refinancing. If you have enough equity in your home then refinancing could be the answer you're looking for to avoid foreclosure. However, before you start thinking about getting an appraisal to find out how much your home is worth talk with a few Dallas mortgage lenders to start getting an idea of your options.

What Are Your Other Options?

If you don't have the income or the equity to qualify for refinancing, you need to start thinking about other moves you can make to avoid mortgage foreclosure--and fast. The Dallas Morning News recently ran a story about how openness can help prevent your lender foreclosing on your mortgage. That's right--the simple act of communication can make all the difference. Brad German, spokesperson for FRMC (Freddie Mac), said, "Many people think that if they call their lender, it will accelerate the foreclosure process. That's not true. There's no reason we would want the house."

If you contact your mortgage lender and explain your situation you might find them willing to work with you.

Sources
CNN Money
The Dallas Morning News

About the Author
Gabriel Traverso is a freelance writer, professional musician, and an artist. He resides with his family in Reno, NV.