Lose your home without losing your mind


Sometimes I think I’m a trendsetter.

But not in good ways. Right now you can’t watch any news program without hearing about rising debt levels and thousands of people losing their homes to foreclosure.

Hmmm…that definitely sounds like me circa late 2006-early 2007. It seems like such a long time ago, but really, it was a little over a year and a half ago now that my home was facing foreclosure, my water had been turned off, and I had buyers walk in while I was showering.

Looking back, even though I lost the home, I should have never had it in the first place. Plus, I was able to do a short sale and get the place sold before it went to auction. But it was still a very stressful event.

So here are a few tips for staying sane I discovered when dealing with my own home foreclosure:

1. Tell a friend

Once you hit a certain number of payments behind (it varies state to state. Usually around 3), you’re default becomes public information. So, before that even happens, tell for sure your family, and next a close friend. Facing foreclosure is not a process you want to go through alone.

2. You’re not a failure. So let go of your pride.

Maybe you shouldn’t have bought the home. Maybe you lost your job. Maybe this, maybe that. The bottom line is that beating yourself up isn’t going to solve your issues.

Also, trying to keep up appearances is just plain silly. Especially if you’re in a very hard hit area (vegas, california, florida, etc), most of your neighbors are probably in the same boat (if they are still around at all). So let go of your pride, cut your spending as much as possible, and prepare for the future.

3. Line up future housing ASAP

For me, I didn’t have the income to support both a place to live and my office at the time. So I moved into my office and slept there for a few months. I wouldn’t really recommend it. Once you know the last date you have in your home (weather an eviction date, sale date, or auction date), start making plans for housing after foreclosure. Craigslist is probably your best bet….and honesty with a private owner goes a long way.

4. Ignore or laugh at your mail

You’re going to get a ton of foreclosure junk mail. People will promise you the world in this junk mail. Some of it will look somewhat official. Take it all with a grain of salt.

My favorite game was to do a mass opening about once a week and find the most outrageous letter and then just make fun of the sender in my head. Don’t respond to anything you get in the mail. Work with a short sale agent if you want to go that route, but make sure and ignore 90% of that junk mail, and laugh at the other 10%.

5. Learn from this experience

For me, losing my home was just another painful lesson that I needed to go from the selfish, short sided, financially illiterate mess that I once was. Think I’ll ever buy a house again with no down payment? Heck no. Do you think I’ll think twice about renting to crazy roommates? Hes yes.

In nearly every difficult situation, there are lessons to be learned. I know that’s hard to see when you are in the thick of it, but it’s true.

Good luck and if you’re looking for more support, check out the insanely useful comments (300+) on my countrywide short sale post.

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  • Brown Eyes

    Thanks for writing about this. I too, have just had to do a short sale on my home that was about to be auctioned. Unfortunately I was barraged with the “if’s”, and by my own family no less. “if you hadn’t bought that place like we said, if you hadn’t lost your good paying job” and so on…. It was very hard then to take, and it’s still hard sometimes when they bring it up. But being positive and not looking back is key. Great article.

  • http://www.jkaravas.comj John Karavas

    Seniors who are behind in their mortgage, or property tax payments have an advantage over pre-60 year old homeowners. It is called the reverse mortgage (RM). Not to be used when other cash resources are at hand, but when there is no cash liquidity available the RM is an ideal tool to be used. You can pay off your mortgage obligations and not have to make any payments while you continue to live in the house. Credit and income levels are not a qualifing criteria. It is just a great way to go when you want to live in your house but have financial restrictions that threaten your goals. (John from jkaravas.com)

  • http://www.getgliga.com Donald Stevens

    When facing a foreclosure, don’t bury your head in the sand. There are many people out there who have gone through the same thing. The interesting thing I have noticed is most people assume a realtor can help them and advise them to save their credit. Unfortunately most realtors are interested in listing as many properties as possible to get a sale. They are not as keen as short sales as they lead people to believe. Insurance agents, realtors, and mortgage brokers are good people to talk to when you are considering your options. The key factor when talking with these people is if they know people looking to purchase a home on a short sale and if they actually have the funds. Listing a house and waiting for a buyer in this day and time is not a great plan. Find someone who works with investors who have cash ready to buy and who knows how to talk to a bank. A little bit of work for you, but it is easier than spending seven years waiting for the negative items to fall off your credit report.