Facing foreclosure in Maine can be a challenging situation, but there are resources and options available to help. Here are some steps you can take and resources to consider:
Contact Your Lender Early:
- As soon as you know you may have trouble making mortgage payments, contact your lender. Discuss your situation, and inquire about any available options, such as loan modification, forbearance, or repayment plans.
Understand Maine’s Foreclosure Process:
- Familiarize yourself with the foreclosure laws and timeline in Maine. Understanding the legal process can help you make informed decisions about your situation.
Maine State Housing Authority (MSHA):
- The Maine State Housing Authority may offer assistance and resources to homeowners facing foreclosure. Visit their website or contact them directly to learn about available programs.
HUD-Approved Housing Counseling Agencies:
- Seek assistance from a HUD-approved housing counseling agency. These agencies can provide guidance on foreclosure prevention, budgeting, and other financial matters. You can find a list of HUD-approved counseling agencies on the HUD website.
Legal Aid and Nonprofit Organizations:
- Reach out to legal aid organizations or nonprofits that provide assistance to homeowners facing foreclosure. They may offer free legal advice and support. In Maine, Pine Tree Legal Assistance is one such organization that assists with foreclosure-related issues.
Stay Informed about COVID-19 Relief Programs:
- Due to the economic impact of the COVID-19 pandemic, there may be additional relief programs available. Stay informed about any state or federal programs that may provide assistance for homeowners facing financial hardship.
Explore Loan Modification or Refinancing:
- If your financial situation has improved or if you qualify, explore the possibility of loan modification or refinancing to make your mortgage more manageable. Your lender can provide information on eligibility and options.
- If keeping your home is not feasible, consider selling it before the foreclosure process is completed. This may allow you to avoid the negative impact of a foreclosure on your credit and finances.
- Consult with a bankruptcy attorney to explore the possibility of filing for bankruptcy, which may provide a temporary halt to the foreclosure process. Bankruptcy is a complex decision and should be made with careful consideration of your overall financial situation.
Financial Counseling and Budgeting:
- Work with a financial counselor to assess your overall financial situation and create a budget. Understanding your finances and finding ways to manage debt may help prevent future financial difficulties.
Remember, each homeowner’s situation is unique, and the best course of action depends on individual circumstances. It’s crucial to seek advice from professionals and explore the available resources to make informed decisions about your home and financial future.
Few things are more devastating to families than the prospect of foreclosure. You own your home and you love it — it serves you well. Yet, due to unfortunate circumstances, foreclosure may seem imminent.
For local Maine families facing foreclosure, the stress can be almost unbearable. Worse yet, the foreclosure process can take months or even years, stretching out the pain for longer than anyone wants.
Fortunately, you have options available to you here in Maine — perhaps more options than you realize. There are many strategies that help for foreclosure in Maine; these are legal foreclosure avoidance strategies you can implement to help you resolve your foreclosure issue so you can get on with your life.
In this blog post, you’ll read about 3 ways that you can avoid foreclosure (there are other ways to avoid foreclosure as well). The goal of these strategies is to help you legally and ethically avoid foreclosure and reducing the pain and frustration that you’re facing, while minimizing any long-term financial commitment or burden to you. Not all of these strategies will apply in every situation but you’ll probably be able to find at least one of the three ways that will work for you.
Strategy #1: Work out a deal with your lender
The first strategy is called a “foreclosure workout”. In a foreclosure workout, you’ll sit down with your lender and tell them that you don’t think you can pay your current mortgage obligation but you’d like to figure something out so you can stay in your house and continue to pay your mortgage.
Contrary to popular belief, lenders don’t want to foreclose! They want happy customers who pay their mortgages, so lenders are often willing to work with homeowners to figure out a deal. This might include a temporary reprieve on your mortgage payments, or it might include a catch-up strategy where your outstanding mortgage payments are spread out so you can catch-up and pay them off, or it might include a restructuring of the outstanding amounts that you owe.
Strategy #2. Bankruptcy
Filing for bankruptcy may seem like an extreme measure but it is one of the “tools” in your foreclosure avoidance toolbelt. When you file for bankruptcy, you indicate to all of your creditors that you are no longer able to pay your bills. Filing for bankruptcy will put a stop to the foreclosure process because all creditors must stop the collection process.
Filing for bankruptcy, though, is a little extreme: it may require you to sell off some of your assets in order to pay off your creditors. And, a bankruptcy will remain on your credit score for many years, which could impact everything from getting a loan to getting a car… even getting a job. So this shouldn’t be your first line of defense!
Strategy #3. Short sale help for a foreclosure in Maine
A short sale is the third strategy — this is where you sell your home and put the proceeds of the sale toward the amount owing on your mortgage loan. A short sale is a preferred method for people facing foreclosure because it is proactive, fast, and very effective.
- It’s proactive, which means that you take matters into your own hands (that’s a major stress eliminator because so much of the stress of foreclosure comes from the process being completely out of your control).
- It’s fast — in some cases, you can sell your home in as little as a week! That’s also because it’s local: You can get help for foreclosure in Maine since organizations like Tristate Holdings 167 help people going through short sales.
- It’s very effective because a short sale can completely wipe out (or almost wipe out) the amount owing on your mortgage. If there is any amount left over that is not covered by the sale of the property, you’ll be responsible for it (although you can sometimes work out a deal with your lender).
With a short sale, you still end up with the reality of having to leave your home but there is a bright side: The impact to your credit is much less (compared to a bankruptcy or a foreclosure) so this is a smart long-term play to give yourself some options.