Avoiding Foreclosure

Avoiding Foreclosure - Tips to Secure your Home Against Foreclosure

Losing a home is the most challenging situation that a family avoids, but faces very often. Families whose properties are mortgaged are in danger of being foreclosed if they fail to pay mortgage obligations on time. Foreclosure is one big problem a property owner faces, and lenders can use it against you to take over your home. Once this happens, you and your family will be forced to move out of your house.

The foreclosure proceeding does not necessarily mean losing your home right away. But almost always, homeowners avoid the process involved and end up without a home. Homeowners who have experienced foreclosure will also get a dip in their credit score. After a foreclosure, they must re-establish themselves and acquire good credit standing to have a chance to buy another home.

What is Property Foreclosure?

Foreclosure is a lawful process wherein a lender can reacquire or recover the remaining balance of a loan from a homeowner who has stopped or cannot continue making the agreed payments. The mortgagee obtains a termination of equitable redemption thru a court order after an agreed statutory procedure. In layman’s terms, foreclosure means a lender’s right to take back or repossess a parcel of land or piece of real estate if the owner fails to complete the payments on the mortgage loan.

In calamities or special circumstances, The Federal Housing Administration (FHA) is entitled to look after and extend the eligibility to reverse mortgages for the house owner. For cases deemed necessary by the FHA, the loan service providers should provide owners with the following:

  • Efforts to delay and reduce mortgage payments for six months.
  • Agree to another six months' relief upon request.
  • Propose an option on how to pay on a deferred mode

The onset of foreclosure proceedings 

Foreclosure starts when the loan payment becomes 16 days overdue from its due date. Then, the mortgage servicer will get in touch to suggest how to work it out accordingly for a viable repayment scheme. This move of the service provider will help the homeowner to bring the loan to current.

From the payment due date to its 30th day, the mortgage becomes delinquent. And if payment is still not sent, collection attempts begin. After 36 days, and if the mortgage is still on the status quo, the homeowner needs to respond to calls or attend to emails from the lender company. 

For the next 45 days of delinquency, the mortgage service will notify you in writing about your status and advise options to avoid property foreclosure. If after the 120 days grace period, the mortgage servicer will commence formal foreclosure procedures, and state rules will now apply. Each state has a corresponding rule to follow to determine how long a property owner is given before the foreclosure date. 

Options to avoid foreclosure

Conflicts related to foreclosure can easily be avoided. Lenders' main goal is to help and provide win-win situations. They help with the use of their money and naturally with it comes the interest to make the money grow. Expectations are set for a timely repayment scheme to keep the lenders' company afloat.

As a tip-off to the borrower, the lender may take note of its losses by making moves to foreclose and evict homeowners in the quickest way possible. An effective way to avoid foreclosure from happening is to communicate ahead and inform any difficulties in making payments. The sooner, the better so that you and the lender can adjust.

"Loss mitigation" is the term used to avoid foreclosure. Federal rules demand mortgage servicers attend to the legal needs of delinquent borrowers. The lender will send a communication letter containing other options to avoid foreclosure with the information and applications suited for you. The borrower's information should be directed to a contact person that can furnish detailed and correct answers.

How to avoid foreclosure?

Even though you are delayed in your payments, foreclosure issues can be prevented as long as the steps below are followed to avoid foreclosure:

  • Pay attention to the problem. 

Delays or non-payment for whatever reason can cause your payments to be doubled. A regular monthly payment is easier to pay than a doubled payment with appropriate late fees.

  • Open communication lines with the lender upon realizing the problem. 

Lenders are not interested in your property. So options for you to repay are at hand, especially during a financial crisis.

  • Always check mails and immediately respond to all mail, especially from your lender. 

Lenders will find ways to reach you. Checking and responding to your emails coming from them will further help you weather your problems.

First, notice may include an offer of information related to foreclosure prevention and options to ease your financial problems. Then, mails may encompass notice of pending legal action. Finally, failing to take notice of the mail will be taken against you during foreclosure proceedings.    

  • Equip yourself with mortgage rights. 

Loan documents are essential, and reading them is a must. You may not immediately notice what action your lender is capable of if you fail to pay. Study laws related to foreclosure laws and timetable of payment in your state. You can also contact the State Government Office for other details.

  • Find out and interpret foreclosure prevention options.  

Loss mitigation options and other valuable information about foreclosure prevention can now be found on the internet. 

Legality in Foreclosure

Legal advice about house foreclosure is a must; take note of the legal aspects of owning a property.

Talk to a HUD-approved housing counselor

Counselors from The U.S. Department of Housing and Urban Development can help you know the options and explain the methodology on how to fix your finances. He may also serve in the negotiation with the lender on your behalf for free or with a low counseling cost.

Determine your spending priorities. 

A simple word that means big is 'Wise Budgeting, choose and identify the needs from the wants' Evaluate your finances, look for items that you can make do without, cut spending and prioritize mortgage payment.

Manage your assets. 

Determining your asset spells the difference, properties that can be disposed of and be sold in times of hardship. Properties that can help pay and reinstate your loan. 

An additional income can also augment the need, these efforts don't make a difference, but it can enhance the income and demonstrate to your lender your willingness to sacrifice to have your home. 

Prevent companies from the chance to foreclose your property. 

Paying for foreclosure prevention help will not sound right; instead, use the money to pay the mortgage. Feelers will be sent to you by a legitimate financing company, promising to represent your lender on your behalf, with what they say is a minimal fee. But in reality, it may even be equivalent to three or four months of the mortgage payment. You can coordinate with an approved HUD-approved counselor free of charge. 

Be on the lookout for foreclosure recovery scams! 

Scams are waiting to lure meek victims. Don't be a victim and be a renter of your property. Suppose any firm claims they can immediately stop your foreclosure by signing a document to appoint them to act on your behalf. In that case, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and conditions.

Scams in bankruptcy foreclosure

It is crucial to get all facts concerning handing over any amount for any particular mortgage problems. 

The Targets of these bankruptcy scams are people with trouble with their home mortgages Operators of this scam usually appear over the internet as an advertisement, on local publications, flyers. They even talk to probable victims whose property is on the list of foreclosure notices.

This scam operates and promises to take charge of problems about mortgage lenders and refinancing to probable victims. There are times when scammers ask the homeowners to pay their mortgages straight to the scam operators. 

To the extent of asking for property deeds making homeowners believe that their problem is being attended to. But all the bucks you paid goes in their pockets, followed by filing a bankruptcy case in your home without you knowing it.

Remember: YOU COULD LOSE YOUR HOME through bankruptcy. When this happens, the money you paid to the scammers will go into thin air.

Heads up for Foreclosure

Careful analysis should be given if and when

  • A 'mortgage consultant" or "foreclosure service" shows up and talks to you.
  • Make contacts and advertise to homeowners who are listed for foreclosure.
  • Asks and collects fees for services to be rendered
  • Convinces people to make payments directly to the individual or company.
  • Instructs homeowners to transfer the deed of property or title to the individual or company.

The best thing to do is to contact the mortgage lender or even an attorney for assistance. These entities will be able to help you find low-cost LEGAL HELP.