Many homeowners are scrambling to find a viable solution to avoid foreclosure and keep their homes. While people seek help with their mortgage debts, a common trend among certain companies is to advise clients to purposely miss a mortgage payment in order to facilitate lender negotiations. This strategy is dangerous and usually results in more trouble in the end.
Voluntarily walking away from a home in foreclosure leaves little chance for a positive outcome. While most people fight to save their homes, the idea of missing a mortgage payment before entering negotiations with a lender holds little value. Advocates of this strategy influence homeowners by tempting them with the money saved during their default period. However, those who live in non-judicial foreclosure states do not have the luxury of staying in the home for several months as the process is completed. In most cases, the homeowners are evicted within 30 days and the house is up for auction a few weeks later.
Homeowners who wish to save their home without filing for bankruptcy may find that a strategic default works against them in the long run. The reason is that lenders are often less willing to negotiate a loan modification or refinance the mortgage once the account is delinquent. The best chance of securing an agreement with the lender is to enter negotiations before a payment is missed. This demonstrates good faith efforts and shows the lender responsibility over the mortgage loan.