Bank foreclosure is a devastating thing. You will not only lose your
home but a lot more. Your credit record will be destroyed and you will
find it very difficult to borrow any loans to help you out in the
future. However sometimes this is your only alternative. When you
receive the letter of repossession you will need to act fast and make a
decision. Firstly remember that you do have some options but these will
depend on your financial situation. If your problems are only temporary
then do consider these options before having to face repossession and
all that comes with it. However if you see no improvements in your
financial situation then repossession may be your only alternative.
Most lending institutions 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 situations where a lender is willing to accept a lower payment
for a brief period of time to keep the loan from getting any deeper into
default.
Bank foreclosure means that you have defaulted in your monthly payments
and the bank has given you a notice that unless you can come up with the
money owed they will repossess your home. This is quite a shocking thing
to have to face. However do not panic but understand what your options
are. As soon as possible go and talk to your lender and be honest and up
front about your financial position. They will be happy to work with
you, as they do not want to be stuck with a repossessed house.
What are your options, 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 marginal 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 options include 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 current equity in
the home or property and turn it into usable cash without having to
secure another debilitating loan.
Some lenders offer the property owners a redemption period. This is a
period of time after the bank has repossessed the house and the
homeowner has to find a way to pay the debt in full, whether by
refinancing or sale. Usually eviction proceedings follow after the
redemption period is offered. The best thing anyone can do when faced
with foreclosure is to remain in contact with their lenders, so that
they can investigate what legal options they have in saving their homes.
This will enable them to work out an agreeable solution between
themselves and the bank. If you don�t ask for the information on your
foreclosure, the help won�t come to you. Remember, saving your home may
be as simple as making a phone call.
It�s also very valuable during a foreclosure to document 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 lesser 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.
Always remember that the bank does not want to foreclose on your
property any more than you do. This is because they stand to lose money.
When your house goes up for auction, the lender will be lucky if they
can get their investment back, as houses go very cheap. Everyone loves a
bargain, even if it is at someone else�s expense. Take advantage of this
situation and after you miss a couple of payments talk to your lender
about reducing the monthly payment. They may very likely work with you
so they can protect their investment.
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