Today, foreclosure is a huge issue in regards the real estate market.
So, what exactly does foreclosure mean? Suppose, you have taken a loan
from your bank, and you secured it against your home. You have been
making regular repayments but fail to make a particular repayment on
time and this arrear keeps happening over a period. In such a situation,
the bank or some other financial institution, from whom you have taken
the loan, may give up your home legally. Now, they sell your home to
make up for their loss and, eventually pays off your other debts, if
any. This legal procedure of selling a fixed property is known as
foreclosure.
Most lending companies are willing to work with their customers and will
provide some basic foreclosure information to them in order to come to
an agreeable solution that does not include repossession proceedings on
their homes. The property owner needs to ask their lenders exactly how
they do their foreclosures if no other solution is available. There may
be instances where a lender is willing to take a lower payment for a
brief period of time to keep the loan from getting any deeper into
default.
If you know that you are not going to be able to save your property from
foreclosure, then you need good information to be aware of the many
different alternatives you have in order to protect your credit. One of
the easiest things to do is request a chance to sell your home before it
goes up for foreclosure. Many lenders are willing to allow their
customers the opportunity to put their house on the market and sell it
for a price that is agreeable to all parties.
What are your alternatives, when faced with bank repossession of your
home? Surprisingly there are quite a few. Firstly you can do what is
termed as a pre foreclosure loan. This is when you find an investor to
pay off your present loan and take over the title of your home. This can
be a family member or an agent interested in selling your home for
monetary gain. If it is an agent they will sometimes pay you a little
more and you will make a small profit. In this way you will both win.
You will save your home from being repossessed and the agent has made a
nice profit. Of course the agent will come out better monetary wise. The
lender is happy because he got back his money and will not be stuck with
a repossessed house to auction.
Other foreclosure information consists of using a reverse mortgage.
People over the age of 62, who are looking at a repossession of their
property, may have the option of securing a reversed mortgage to pay off
the debt. Basically what a reversed mortgage does is take the present
equity in the home or property and turn it into usable cash without
having to secure another debilitating loan.
Other useful foreclosure information consists of documenting everything.
No matter what else happens, make sure you document every conversation
with your mortgage company that you have. Repossession procedures
usually take three to six months to run their course from start to
finish. As long as you remain in contact with your lender and are
either; making an attempt to work out an agreeable arrangement to bring
your mortgage to date, to pay reduced amounts as agreed. Or attempting
to sell your home, you have a legal leg to stand on if for some reason
you need to fight the lender in court.
Another alternative to bank repossession is a stop foreclosure loan.
This can be done if you are not in a very bad financial position, but
need a break with your monthly payments. With this loan you will pay off
your first loan and start a new one. If you have been paying your house
payments for a little while, this could work in your favor. Because the
principle will be smaller it will make the monthly payments less. This
will certainly ease your financial situation and allow you to get back
in control.
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