In a majority of
foreclosures, one of the homeowners hides it from the spouse. Usually, the partner keeping the secret is the person responsible for paying the bills and is (or feels) responsible for causing the problem and fixing it. This partner may feel like a failure for not properly managing the finances or for overspending, or the person may be using the family finances to support an embarrassing and costly habit.
Attempting to sweep the foreclosure under the rug can compound the problem in any or all of the following ways:
· Makes you more susceptible to becoming a victim of foreclosure rescue scams. One of the con artist’s most powerful strategies is divide and conquer. They will offer ways to avoid foreclosure so your partner “never has to know about it.” They are afraid that the more people “know about it,” the more likely they will get caught.
· Removes one of your pillars of support. As a couple, you have a much better chance of improving the outcome than by acting alone. Your partner may have some excellent ideas and resources to help save your home.
· Wastes time. The longer you try to keep the secret without taking positive steps to resolve the problem with your lender, the less time you have to save your home, sell it, or pursue other options.
· Leads to distrust with your partner, who will eventually find out anyway.
Remember, your partner is going to eventually find out about the foreclosure. It’s always better if your partner finds out earlier from you rather than later from a stranger… like when the sheriff shows up to evict you and your family from your home or the person who purchased the home at auction shows up at the front door.
Communication Is Key
If you and your partner can’t have an honest discussion about household finances and troublesome behaviors, then your entire relationship is already at risk. Look at the foreclosure as an opportunity to become open and honest and build intimacy. Either your relationship will not survive, meaning it was not worth trying to save in the first place, or it will deepen and become more rewarding over time.
Financial Setback + Communication Breakdown = Loss of Home and Equity
What is equity? Equity is the amount of money that you get to keep after you sell your home and pay back the debt you owe on it.
Adding communication back into the equation gives you and your partner a much better chance of addressing the underlying financial shortfall and ultimately saving your home or selling it to cash out enough equity to make a graceful exit.
Whether you’re currently facing foreclosure or have just missed one or two mortgage payments, tell your partner immediately. Losing your home in a vain attempt to avoid an uncomfortable discussion with your partner is the wrong approach.
Avoid the Worst Options
The worst option in foreclosure on your Ann Arbor home is to try to sweep the problem under the rug. Well, actually there are three “worst” options:
· The absolute worst option is to deal with a con artist who’s out to steal your home through some foreclosure scam or strip you of the equity in it.
· The next worst option is to do nothing. When you do nothing, the lender forecloses, the property is sold, and you’re evicted. You can say “so long” to both the property and any equity you built up in it.
· Another bad option is choose a solution that puts you right back on the path to future foreclosure. Some people, for example, borrow money to reinstate the loan – that is, bring the payments current with the bank. This is a viable solution if the financial setback was temporary and you will have sufficient income to start making payments on your mortgage and on the money you borrowed to reinstate. However, if you are unable to make the monthly payments, you will probably be better off selling the home and finding more affordable accommodations.
Overcoming Your Fears
If you are afraid of telling your partner, then ask another family member, a close friend, a financial counselor, a marriage counselor, or someone else that you and your partner both feel comfortable talking with and that you both trust to help you break the bad news.
An unbiased third party can act as an intermediary, laying out the facts more rationally, so arguments do not get in the way of a full disclosure. You want to come clean and lay all the facts and figures on the table so you and your partner know what you are dealing with.
Remember, what has happened is in the past. You and your partner can do nothing to fix what has already happened. You can only make things better now and for your future together.
About the Author: Ralph R. Roberts, GRI, CRS and his team of foreclosure experts regularly assist families facing foreclosure and have authored Foreclosure Self-Defense For Dummies (John Wiley & Sons).
