I am Jonathan Flores and I am not a financial guru. I was a regular guy who did random jobs, I used to travel a lot and I was enjoying my life to the fullest. Before I got married I did a lot of solo travels, so I’ve visited almost every major tourist destination in the world. On one of my latest travels to Europe, I meet my future wife.

For a while, we continued with our hobby, and that is traveling so we visited places that we didn’t do before, like boat trip to Blue Cave from Split, and other places that we felt in love with. We had a nice life but after we got our first child my dearest wife got health issues and that is when the problems started. Our incomes went down and medical bills up and we were falling short on our house payments. All of a sudden we were facing foreclosure and then I said NO, it’s not going to happen. It took me a long time to beat ‘the system’ but I’ve realized that educating yourself is of great importance, you need to know how to find a piece of good information, and you need to know your rights. Good information is what I want to bring to you.

How the story goes when you decide to buy a house?

You had your time doing things that you probably won’t do when you get married. Mine was traveling, so after visiting most amazing places in the world like the ancient city of Split, or Nepal where I took Bhutan – Nepal – Tibet tour which lasted 14 days and costed me 7000 USD. I’ve decided that it is time for me to settle down. So, you have finally made a decision to buy a house, and like the majority of the population, you don’t have the cash to buy it so you turn to financial institutions that are willing to finance your project. You find a house that it’s in your budget; your credit is good and incomes high enough so the financial institution is ready to follow your investment. You obligate yourself to pay borrowed money plus the interest and the financial institution is giving you a loan to buy a house that they use as collateral, and that is how the mortgage works. Until you pay off your loan a financial institution is basically the owner of the real estate, and that makes sense. Imagine yourself in the position of the financial institution, you are allowing a huge sum of money to someone unknown, and that someone does haw income but you need to make sure that you will secure your investment in case that other parties stop paying you due to many possible reasons. Well, if you stop doing payments financial institutions will terminate the contract and sell your house in order to recover their funds, it is simple as that.

What happens if you miss your payments?


It is a legal process in which lender is recovering their balance on the loan from the borrower who has stopped making payments, usually 3 to 6 months, by forcing the sale of the real estate that was used as collateral in the loan. Foreclosure rules and policies vary from state to state and there are several types of foreclosure. When it happens you are going through some emotionally tough times and you have the feeling that everything is falling apart. Don’t do that to yourself, there is always a way out. Foreclosure is not something irreversible and it can be stopped! You can always find a way out and fix things up.

Reasons for Foreclosure

Life is unpredictable and there are many reasons that can lead to foreclosure. The most obvious reason is that you basically did fraud and you didn’t do any of monthly payments. The most common are other reasons, in some cases, you can be responsible and change things up but sometimes it’s not up to us, maybe it is bad luck or unfortunate development of the events, but here are typical reasons why people find themselves in trouble and potentially face foreclosure.

  • Death in the family

This sad event can cause so many problems and bad feelings. You are struggling with the loss of your close family member and you might inherit a debt that can lead to your own debts and inability to make a payment on your mortgage.

  • Divorce/loss of a second income

Losing a second income is the most common reason for foreclosure and it usually happens in case of the divorce. These are definitely rough times.

  • Job loss/unexpected unemployment

It’s easy to find yourself in problems if you lose a job. Every month you need to bring money because bills will arrive each month, so if you lose a job it takes seconds to end up in problems. This is not a scenario that anyone wants, right? Everyone has the need for self-fulfillment through work, and work achievements. At the end of the day you want to be a provider, you want to take care of your family, make sure that you have a place that you call home, you want to buy your wife a gift, surprise kids with some random awesome gift, like a drone for an example. If you don’t know anything about drones, don’t worry, just read some of these buying guides by dronesglobe and you’ll be fine. So losing a job is difficult and it’s hard to adapt to the new regime and reduce costs significantly, so many people find themself in problems if they don’t bounce back really quickly and find another employer.

  • Sudden illness or medical emergency

If you are sick you don’t work, and if you don’t work you don’t make money; the math is simple. If you are facing serious sickness medical bills can be extremely high. A lot of people bankrupt in these scenarios.

  • Unexpected major home maintenance expense

This can definitely cause problems. If you have unexpected major repairs it can set you back and put you in the problems. If you don’t have savings and/or huge income this can cause serious problems.

How to avoid foreclosure?

You can always do a few right things to help yourself. Bad things can happen but what matters the most is your reaction.

  • Don’t ignore the problem

Face reality and start doing actions. Things are not going good? OK, you are not the first person on the planet that had financial problems. Deal with the problem and start working on a solution. Don’t fall behind too much, if you missed one payment at least pay something and show will to solve it.

  • Talk to your lender and respond to mail and emails

You won’t help yourself if you ignore your lender. Start talks and show your willingness for cooperation. They don’t want to deal with your property; they just want money coming in and the easiest solution.

  • Educate yourself on mortgage rights

Education and research are key. Learn what rights and obligations you have and also what instruments can you use when you are facing difficult times.

  • Do your finance properly

Deal with the priorities, don’t spend money on stupid things and get rid of unnecessary expenses. I can bet that if you do your finance right you will find a solution.

  • Learn about foreclosure prevention options

Yes, you have solutions to stop foreclosure and if you are facing one now is the time to learn about it.

How to stop foreclosure?

  • Apply for a loan modification

Maybe you can refinance your loan and find a better-suited model. Don’t ignore this option but you need to act as soon as possible so you don’t ruin your score.

  • Sell your home

Having problems? Sell your house, buy a smaller one or rent it. Don’t let your house be such a burden.

  • Consider bankruptcy

If the previous two are not the option, do bankruptcy because it stops all foreclosure processes.

  • Talk to an attorney

Talk to an attorney and see if there is a chance for a lawsuit so you can stop a foreclosure.