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Ways to Stop the Unpleasant Foreclosed Homes
Foreclosed homes are never a pleasant concept. Depending on the circumstances, there may be no way to avoid the foreclosure process. However, in some cases, there are ways to avoid it and, in every case, it is worth the effort to try.
The best way is either to refinance the house, or to modify the existing mortgage. This means that you need to start early. Don’t wait until you are already behind on payments. After all, you should know well before your lender that you will have financial problems coming up. Definitely don’t wait until foreclosure has already started.
Know that your lender does not want to foreclose. They earn no interest on a foreclosed property and actually incur expenses during the foreclosure process, as well as later to keep the house maintained until it can be resold. The process is costly to the lender and they are likely to listen too any reasonable plan, especially in the following circumstances.
* You have substantial equity in your home.
* If unemployed, you can show that you will be re-employed soon.
* You have a long and good payment history with them.
* Your credit report is normal if not good.
Next, if it appears that you cannot get a mortgage modification, consider selling the house yourself. The benefit is that, even though you will lose your house, you will retain your credit rating. This will make it possible for you to buy again later, when your situation improves. This may be easier said than done in the current housing market. Home prices have dropped and you may be in the position of actually owing more on yours than it can fetch on the current market.
Last, consider bankruptcy. This is a serious matter so you need to give it a great deal of thought and be well informed about the process and the consequences. The regulations vary and you will need a lawyer to assist you.
Be aware that bankruptcy will destroy your credit rating for many years to come. If you can’t refinance or sell your house this may not matter since foreclosure has a similar affect on your credit score. It can also affect the kind of job you can get. Many employers will not hire a recently bankrupted person
There are some advantages to bankruptcy. In some cases, bankruptcy provides for the loan modification that the bank did not want to make. Be very careful here though. If you don’t pay your lender in the first case, you will face foreclosure. If you don’t pay in this case, you have defied a court order.
In most cases, if you are about to lose your home through foreclosure, you likely have other debts as well. Bankruptcy will usually set those aside.
In addition, do you have personal assets, other than the house? If so, after the foreclosure and resale is complete, the foreclosing bank may seek to force you to liquidate your personal assets to satisfy the shortfall between the amount you owe them and the lesser amount they received when they sold the repossessed home.
There are no good points about losing your home through foreclosure. However, if you take action early to understand the process you are more likely to mitigate its effects on your life.
Original: Ways to Stop the Unpleasant Foreclosed Homes
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