Despite the fact the housing collapse was years ago, people still lose their homes to foreclosure every day. More often than not it’s due to either outrageous medical bills or over spending paired with a sudden loss of employment.
It’s a devastating experience for the homeowner.
Taking control over the situation during this difficult time is what will get you through the process so you can start rebuilding your life in a new place to live.
How To Handle The Blow of Losing Your Home
Let’s imagine the chain of events.
You’ve been unable to pay your mortgage for a couple of months, so finally the bank sends you a foreclosure notice. Unable to find the money and pay what you owe on the loan, the bank takes your home. You’re left feeling defeated, guilty, ashamed and probably a whole host of other emotions.
Other than losing a loved one, I don’t know what’s more devastating to someone than losing their home. You’ve been given a kick to your self-esteem, and your pride is in the toilet. The feelings of shame, embarrassment and humiliation run so deep it can take a long time to recover.
It’s important to remember that losing your house can and will give you a psychological kick in the pants — not just a financial one.
When faced with losing one’s home, many people go through a grieving process similar to what one might experience if losing their marriage or career.
In her groundbreaking book, On Death and Dying, Elisabeth Kubler-Ross identified five stages patients commonly experience when given a terminal prognosis. To a much lesser extent, when someone loses their home they go through these five stages as well.
I remember when I was falling behind in my mortgage payments. The bank started calling on a regular basis and what do you think I did? I ignored the calls. It wasn’t until I got the formal notice of default that I woke up and started paying attention.
Unfortunately, many people do the same thing. They ignore the calls, letter and warning signs, hoping that something — anything — will come along and change the situation fast!
What To Do Instead: Don’t ignore the calls and letters. Have a discussion with your lender and see if there is anything that can be done to have you get up to date on payments and keep your home. You won’t know unless you answer the calls.
When I woke up from the fog, I got mad. I was pissed off — at myself mostly for being so stupid to have ignored this problem for so long!
A lot of people at this stage of the game get mad at things besides themselves — their spouse, the lender, just about anyone will do because after all, it must be someone’s fault they are in this mess. I remember a client telling me how it was the lender’s fault they signed a variable interest note on a house they couldn’t afford.
What To Do Instead: Truth be told, you’re in this situation due the choices and actions or in-actions you’ve made. Blaming others isn’t going to change the situation. At some point, you have to realize it’s all on you. Stop blaming and start taking responsibility for what’s happened. Once you can do this, you’ll have an easier time finding solutions to your problem. The energy you’ve spent blaming can now be redirected to problem-solving.
Anger always leads to negotiation. You start making deals with God that sound something like, “Please God, if you let me keep my house I promise never over to spend again, and oh, I’ll go and get a second job, too.”
The problem with this approach is it rarely, if ever, works. The time to have procured that second job has long passed. Negotiating with a higher power or with one’s self won’t work.
What To Do Instead: Use those bargaining skills to see if you can make new arrangements with creditors. Find a reputable attorney and see what your legal options might be. I’m not advocating bankruptcy, but it might be a viable option for you. Consider all solutions and then decide what’s right for you.
The closer you get to the actual event, and as the reality of the situation sinks in, some people will become physically ill from the stress and be unable to deal with the daily strain and constant grind. This can lead to feelings of depression.
What To Do Instead: If you feel this way, seek counseling and support from a qualified mental health specialist. This will take time. Be kind to yourself and remember, everyone makes mistakes. This is just a mistake you’ll learn from and come back from someday.
Eventually, that state of “I don’t care” leads to a state of acceptance that the foreclosure is coming and must be dealt with. This leads you to search for a new place to live; consider a plan to fight the foreclosure; a visit to discuss the situation with a bankruptcy attorney; or to remain in the house for as long as you can, payment free. The point here is you finally start taking action.
What To Do Instead: Hopefully you began working on problem-solving and negotiating with lenders before you get to stage five, but if not, now is the time to take action.
These steps can take days, weeks or months to go through; everyone is different.
The sooner you start taking action, the better off you’ll be if you are faced with losing your home.
Instead of feeling like a victim to life circumstances, you can begin to take control over the areas of your life you can control.
It’s not the worst thing that can happen to you, but it can be far more painful if you fail to act at all.