Thursday, December 1, 2011

First Person: 5 Things to Do If You’re Facing Foreclosure

Walker held the inevitable estate sale

Whether you’re in foreclosure or afraid you might end up there, now is the time to get in action. The prospect of losing one’s home is an incredibly difficult place to be and tends to inspire paralysis over action. I get it. I’ve been there myself. In 2009, my husband and I sold our Los Angeles home in a short sale, managing to avoid a bank sale on our home by mere days. It was a long process getting there and one that altered our lives completely… for the better.

Here are five things that made a huge difference for us:

1. Communication

I know how you feel. You don’t want to talk to anyone about the fact that you’re behind in yourmortgage and you have no idea how you’ll pay it. In fact, talking about it is the last thing you want to do. But talking is critical to creating a positive outcome.

Communicate with your partner. Be open. Be honest. Be patient. Talk about the facts of your situation. Get to the nitty gritty of your finances. Stick to the facts and don’t blame. There is no room for blame. Own your own mistakes and commit to learning from the experience.

Walker held the inevitable estate sale

Communicate with your lender. Tell them you’re committed to saving your house, make sure they are aware of the circumstances that led to your default and talk to them about your options. You’ll want to know what you can afford to pay on a monthly basis before you request a loan modification. Call your lender weekly. Tell them that you’re calling to touch base and to see if any progress has been made with your request for a modification. Tell them you are committed to staying in communication and being responsible. Make sure that they note the call in your file. Make sure that you note the call in your files. Always note the name/ID number of the person you spoke with and the time and date of all calls.

If you’re anything like us, we were hesitant about telling our friends and family just how bad things really were. We were embarrassed. But, we were sure glad when we did tell them because we no longer had to pretend that everything was okay. And by sharing the truth about our situation we opened ourselves up to the support and love of our family and friends. Tell them now. Don’t wait. It’s not going to be easy, but you’ll be glad that you did. Let them in and allow them to make a difference for you. They’ll be glad to have the opportunity.

If you haven’t already, talk to a real estate agent and get a CMA (comparative market analysis) for your home. You’ll want to know what your options are and finding a real estate agent who has training inshort sales and foreclosures is going to be your best bet. We had our house on the market way before our first notice of default arrived, but we didn’t consider a short sale until months passed with the house just sitting on the market.

And lastly, you’ll want to communicate with a HUD counselor. HUD is the Department of Housing and Urban Development and it has counselors that offer guidance free of charge. They can help walk you through your options and navigate this confusing time.

2. Make a pledge to turn your crisis into an opportunity

Did you know that according to a study by the National Bureau for Economic Research foreclosures are making Americans sick? It’s true. Maybe you’re in foreclosure now as you read this. You might be feeling that tightening in your chest. The stress makes it hard for you to breathe. The questions that turn like a knife in your stomach:

How will we get out of this? Where will we live? How will I provide for my family? Will we ever bounce back?

They weigh so heavily. They might be making it hard for you to get out of bed. Hard to be a normal person. I get it. Completely.

The most difficult aspect is the feeling that there is nothing you can do.

But, you know what? No matter how bad it is; it only feels like there’s nothing you can do.

But there is something huge you can start doing now. You can take care of you. Take care of each other. Nurture yourself through this awful time. Love. Commit to rising above the hardship. Commit to turning your foreclosure story into a triumph over adversity story worthy of a Hollywood epic picture.
How? Make a pledge to turn this crisis into an opportunity. When we missed our first mortgage payment, my husband and I saw the potential for things to get really dark and nasty. It was that realization that had us pledge to each other to be at our best. This is our pledge…

The Love in the Time of Foreclosure Pledge

I, [say your name], pledge:

To not allow this foreclosure to get the best of me.
I will mine this financial crisis for every opportunity.
I will stay in communication with my family and friends.
I will stay in communication with the bank and my creditors.
I will learn every lesson there is to be learned from this.
I will live in the moment.
I will ask for and accept help.
I will take time every day to connect with the people in my life.
I will take time every day to do something that makes me happy.
I will empower myself to be happy without the need to spend money.
I will continue to live my life productively and responsibly.
I will acknowledge my fear and act in the face of it.
I pledge to Love. To love others, to love myself and to love my life…

…in the time of foreclosure
…in the time of hardship of any kind

This pledge made the difference for us.

View from Stephanie's home

We actually flourished as human beings. We grew closer as a married couple. We wound up living a huge adventure on a beautiful island that gave us our son. And it is all because we pledged this to each other. This pledge, that we took very seriously, got us through foreclosure and then some.

Feel free to steal ours or write your very own pledge. And when you do, make sure you share it with at least one other person. Sharing it helps you keep it alive.

3. Research

Be like Nancy Drew and learn everything you can about your situation and options. You might even want to create a Google Alert for the terms foreclosure and short sale. You’ll end up getting a lot of alerts, but this way you’ll be able to easily keep up on any changes and critical information that pertain to the housing crisis. The point is to educate yourself about your options. The foreclosure process varies state to state so make sure you keep this in mind in your research.

4. Put your house to work

Estate sale items

Use your house while you still have it. Have a garage? Clear it out and rent it out. Have an extra room? Find a renter. Or, rent out your entire house on a site like Zillow.

List your house with location scouting companies. You never know when a film production company might be looking for a house like yours in your area. Google “Location Scouts” and your city to find local companies.

We posted our home on this site — Plan-It Locations — and they actually called us for a Comcast commercial after we had already sold the house.

At the very least, you try and it doesn’t work. At the very best, a big Hollywood production companybooks your house for a film and pays you enough money to pay off your mortgage. Don’t scoff. It could happen. Did you hear about the people who found a vintage Superman Comic Book in the basement of their foreclosed home that was worth enough to pay off their mortgage?!

5. Create a back-up plan that excites you

It’s never too early to start thinking about where you will go if you lose your house. And if it does come to that, it will be so much better for you if you have a plan that actually excites you.

We started the process of creating a back-up plan by brainstorming ways we could live rent-free. We came up with a list and started to get excited by the prospect of perhaps being lighthouse caretakers, for example. We subscribed to the Caretaker Gazette and started reading about all of the various care-taking and house-sitting opportunities around the world. As it turned out, we ended up living rent-free as caretakers of a 1910 farmhouse on San Juan Island. It wasn’t anything we ever thought we would end up doing, and we’re so glad that we did. Let me tell you, there’s nothing that can take the sting out of losing your home like living rent-free on a beautiful island surrounded by mountains and Orca whales. Give it a try.

I interviewed a woman for my blog who, after selling her house in a short sale, moved her family into an old Airstream Trailer. It was always a dream of hers to travel the country in an Airstream. She, her two daughters, her boyfriend and their Labrador love their downsized and out-of-the-box new life.

My mom, who is a Realtor®, had suggested to us at one point to contact the bank about letting us live in foreclosed homes rent-free in exchange for us keeping up the properties. I think that’s a really great idea and more banks should be looking into creative ways in easing this housing crisis.

Stephanie Walker with her husband, Bob, son Malcolm and their dog, Pablo Neruda.

I have a friend who lives rent-free in exchange for being the manager of his apartment building. You’ll be amazed by how many rent-free opportunities there are once you start looking.

My husband said to me at one point, “If you think about it, losing everything is the opportunity to live the life of your dreams.” When you have “nothing” to lose, you have the freedom to actually go for your dreams. You could look at this as the opportunity for a re-boot in your life.

Use this time to really look at what you would be doing with your life if you could do anything. Would you change careers? Go back to school? Turn to a life of service? Sail around the world? “Road-school” your kids and see the country?

Consider selling off all of (or most of) your possessions. Without all that stuff weighing you down, you’ll be amazed at what opens up.

It can be all too easy to allow yourself to be consumed by the prospect of losing your home. Don’t let it consume you. Stay on top of it. Be proactive. But don’t let it take you over. If you notice yourself saying the words “If only” on a regular basis, you’re in danger of losing yourself to this crisis. Dwelling on all the things you could have done to avoid this, doesn’t help.

What does help? Getting out there and living your life. Using this moment to create. Who do you want to be? How do you want to be? Know that it is possible that you will lose your house and everything in it… and that it doesn’t have to be the end of the world. It can be the beginning. An exciting new beginning for a brand new you.

Stephanie Alison Walker is a playwright, blogger and the author of the new book Love in the Time of Foreclosure that details how she and her husband created the life of their dreams in the midst of losing their dream home — a story she also parlayed into an award-winning play, American Home.

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