Stop Foreclosure And Save Your Home

[Jun 16, 2008.]

Foreclosure is a household name now, ever since the end of 2007 which saw the collapse of the Sub Prime Mortgage market. Now home owners are worrying about missing a payment and many are facing the threat of foreclosure.

Foreclosure is the end result of a long hard financial battle. When a home owner is no longer able to make those monthly mortgage payments the lender has the right to order the property to go under foreclosure. This is the process where the lender or bank takes the property and sells it at auction in an effort to recoup its losses. A mortgage is a loan secured against the property which allows foreclosure to occur should the home owner fail to repay the loan. Foreclosure rates are seeing record numbers currently with no sight of slowdown anywhere in the near future.

Foreclosures do not occur overnight. It may take several weeks for the lender to send the notice of intent to foreclose to the home owner. It may then take several more weeks for the foreclosure to hit the courts. Afterwards, the judge issues an order of auction. The home is sold and the loan paid off when the proceeds. Along with the loan, the money from the auction goes to lawyer fees, court fees, and other fees incurred during the foreclosure process. Whatever is left of the home’s profits, if there is anything left, goes towards the now former property owner.

Many home owners can see a defaulting payment months ahead of time and should act as soon as possible in order to avoid foreclosure. Being proactive is really the best way to fight against this process, besides, making the payments of course.

Even if the home owner waits until the actual foreclosure process has began there are still ways to fight it.

One of the most common and effective ways is to make the payment. After foreclosure has begun, lenders require the full amount of the remanding loan plus several fees such as appraisal and lawyer fees. Many lenders require the full amount up front should you choose to go with this method. The lenders will no longer be willing to take a risk on you and may not believe that you will be able to make the full payment plus extra fees since you defaulted on the monthly payments already.

Another option that is not really being offered all that much now a days is a modification on the original loan agreement. This works by adding an additional sum onto the monthly payment or extending the period of the loan. Home owners can usually choose which one they prefer but it is advised to take the same monthly payment at an extended duration. After all, you were having difficulties making that amount already so it makes no sense to add to it.

This method is really only offered if the lender knows for a fact that the property will not fetch enough at auction to pay back the loss loan amount.

It is possible to stop foreclosure though the process can be taxing. The best method is to still catch the default early and get in touch with your lender so you both can work out a plan that allows you to keep your home.