Preventing your foreclosure, the basics you need to know.
A plan of attack for the homeowner in the prevention of foreclosure.
1. Completely assess your financial situation.
So many people enter into a mortgage agreement with no intention of walking away from it. There are countless unforeseen circumstances; mortgage resets, financial difficulties, medical bills, lost jobs that can cause a default. Matters might be made worse by the fact that the home has actually lost value over the past several years, making a refinance of the property next to impossible. A simple twist of fate can leave you facing a homeowner's worst nightmare: foreclosure.
First step, contact your lender
You may not agree with your lender on a number of issues, but where foreclosure is concerned, you and your lender are on the same side. Your end lender, in many cases not the mortgage company that originated the mortgage, in interested in your loan and the interest that comes along with it. They are not in the business of owning homes. If you can present the case that you have the capability of repaying the loan, your lender may offer you a number of options to help keep your mortgage afloat. If your case for not paying is based on bad faith, the lender may decide to cut its losses by taking steps to foreclose on the property as soon as it is possible.
The key in the process is to contact the lender as soon as it appears that you will not be able to repay the loan as you had originally agreed. The further along in the process, the less options that your lender may have to resolve your problems and the more likely you are to actually having your home sold at auction.
The foreclosure process
The foreclosure process begins when your loan payment becomes past due, usually after the 15th day of the month, depending upon the actual terms of your contract. When your loan becomes past due, your lender will contact you determine the cause of your delinquency and work out a repayment schedule to bring your loan current.
When your payment becomes 30 days delinquent, you lender or servicer will start collection attempts in earnest. At the point your loan payments fall 90 days or more behind, the lender or servicer will likely contact legal counsel to initiate formal foreclosure proceedings.
Along with examining your legal rights and options in this site, you many want to review the foreclosure timeline, state specific foreclosure laws, and some real world scenarios on how to prevent the foreclosure of your home. You can also consult our extensive resources and links to find additional information available on the web.
Subscribe to our free monthly newsletter to keep abreast of all the latest changes in the real estate and mortgage industries.
1/25/12 Principal cuts don't help homeowners - Bloomberg
1/25/12 Alan Greenspan's ship of fools - Guardian
1/25/12 Foreclosure auctions show raw capitalism - New York Times
The Fed flying blind - Atlantic