WHAT NOT TO DO WHEN FALLING BEHIND ON YOUR MORTGAGE

1. Do Not Deed Your Property to a Third Party – deeding out your property to someone would mean that you would no longer have any control over it. With the deed happening, the person would have full rights to move into that property, put it on rent and endorse the money himself, sale it out or use it for any purpose. However, it is still going to be you and not him who will be responsible to abide to the mortgage loan obligations. You may also have to see your credit getting detrimental if the third party fails to make the mortgage payments.
2. Do Not Authorize a Prospective Buyer to Deal Directly with the Lender – the end goal of a buyer is to purchase the property for a minimal amount and he may even request the lender to accept a discounted payoff. The buyer also has complete control of the information provided to the lender be it accurate or lacking. The bargaining period can last a long time and the buyer is likely to walk away if the deal fails. This may cause foreclosure to loom with a limited time for resolving the situation.

   It is recommended that you discuss with your lawyer or a licensed real estate agent if you hold the belief that the best solution is to allow the buyer and lender to directly interact with each other. This would ensure the legitimacy of the transaction.

3. Do Not Pay Upfront Fees – a 'quick fix' solution may be proposed to you by a few companies and individuals, taking advantage of your financial distress. There is not much that their promise of saving your home, for a varying fee, can do.

   Never pay an upfront fee to anyone who wills to negotiate a short sale on your behalf. The fees should be submitted by a lender only after a successful short sale closes. Whoever asks for an upfront payment should be thought as making a deceptive promise as the negotiation of a successful short sale calls for proper skill and knowledge. We charge nothing for providing you with service as payment is collected by lenders once the transaction is complete.

4. Do Not Ignore the Problem – Doing nothing is always an option, but the situation is not going to budge if you keep your head buried in the sand. A lot of homemakers allow foreclosure to occur without realize that this can damage their credit for years.  In this case it would not be possible for the homeowner to secure a Fannie Mae backed mortgage for at least 5 years.  Besides, the lender may return after the foreclosure with an effort to collect.  In case of a short sale, the homeowner is given eligibility for a Fannie Mae backed mortgage just 2 years later and the lender can no longer pursue homeowner for the deficiency.

Scrutinize your options well to make an informed decision that perfectly fits your situation.