Foreclosures are a result of borrowers being unable to pay home loan payments. Usually, property foreclosures take place when there is a court or trustee action which involves a home loan company, a lender, or perhaps a mortgage holder that tries to repossess a borrower’s home to satisfy a debt.
What’s real estate foreclosure?
Legally, if homeowners continuously skip mortgage repayments, the lending company can take the home. Real estate foreclosure is actually a lawsuit in many states used by a loan company with the defendant being a home-owner, in order to acquire property ownership in an effort to fulfill a financial debt.
What exactly is foreclosure time-line?
Actually, property foreclosure time-line based on the state or the laws provided for property foreclosure within a certain state. It’s a legal procedure through which a loan provider or a mortgagee repossess, or reclaims, a home that is the loan collateral provided by the borrower, also called the mortgagor.
Some good ways to get rid of foreclosure situations:
1. Modification: This option will let you modify your present loan payments to an amount you can afford to pay. Usually, in this case, the loan term is increased a few years allowing more time to repay the loan with a lower monthly payment amount.
2. Forbearance agreement: The lender will agree to stop payments for a few months until your financial circumstances are better. The payments that are not made during this period of time are tacked on to the back end of the mortgage loan
3. Refinance: If you have a lot of equity in the property and have had a good payment record with the lender, the lender may refinance the property to a lower interest rate or a fixed rate for a longer time period, which could lower your monthly payment.
4. Offer a deed in lieu of foreclosure: Here the borrower just signs the deed over to the bank and walk away. You’ve avoided a foreclosure being on your record. Be sure to get in writing the bank will not seek to obtain any additional expenses or payments from you should you take this avenue.
5. Sell the property through a short sale: Under this alternative, your bank’s approval will determine the least amount of money for which you can sell your property. Thus, if you have a buyer willing to buy your property and the bank approves the sale this will avoid a foreclosure. You will not be subject to any penalty for any difference between the mortgage amount and the selling amount.
6. File for bankruptcy: This should be a last resort measure. A chapter 13 bankruptcy filing stops a foreclosure immediately. It will give you time to work out a possible payment plan to save your home if that is your goal.
If you fail at all the above-listed options, then you have to allow the foreclosure to proceed. Truly, this is the very last choice. In some states, you may be subject to what is called a deficiency judgment, which means you will have to pay the lender the difference between what it obtained from the sale of the property and what was owed. Seek the advice of an attorney or local housing counselor before you take this action.