How to Save Your Home From Foreclosure: What You Need to Know
Avoiding Foreclosure: What Steps Can be Taken?
Over the last two decades, many American homeowners have ended up in a situation that they may never have expected to: behind on their mortgage payments and facing the threat of foreclosure. Foreclosure is a frightening word. It can carry a certain dread with it, like bankruptcy, or failure. But foreclosure itself is a process, not an end result, and there are many things a homeowner facing foreclosure can do to forestall and reverse the process.
Due to a variety of federal laws, foreclosure isn’t nearly as cut and dry as the repossession process that applies to other forms of secured credit. Unlike when someone with an auto loan falls behind on their payments and the bank sends a repo company to collect the bank’s secured property (the car or truck) so that it can be sold against the remaining debt on the loan, the repossession of a home removes a necessity (shelter) from the debtor’s life.
There are laws to protect homeowners against this happening for the safety and welfare of all those involved. If you are facing foreclosure, there are many things that you can do to fight the process, slow it down, and you may even end up with a more favorable loan as an outcome.
Communicate With Your Lender
The first thing that a homeowner facing foreclosure should do, preferably before they fall behind on their mortgage payments, is to begin communicating the hardship with their lender. Mortgage companies have a vested interest in keeping the people they lend money to in the homes they’ve purchased. They profit from the timely payment of loans, and the interest and fees associated with that repayment.
They actually stand to lose money in most foreclosure circumstances, and will work with their customers to keep them in their homes, often waiving late fees and restructuring payments to help homeowners get back on their feet.
Seek Government Assistance
Even before the housing bubble burst and the economy crashed in 2008, local, state, and federal agencies were given the authority to work with lenders and homeowners to keep foreclosures to a minimum. If you are facing foreclosure, put in the time to research what government programs are available to help you keep your home and to keep your lender at bay. Investigate what lenders may and may not do in your area. Often a lender won’t know what is legally allowable in your community, county, or state.
Watch Out for Foreclosure Scams
Finally, be wary of any company soliciting your business as a third party. They may offer to negotiate on your behalf with your lender, they may offer to help you file for bankruptcy, they may even ask you to sign the title to your property over to them to facilitate the process. All of these are well-known scams. Check the federal foreclosure website for these and other notorious scams targeting homeowners who may be in trouble.
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