Effective Ways to Stop Foreclosure
Foreclosure is known to be one of the most undesirable situations a homeowner has to deal with in their lifetime. Getting a mortgage and owning a home is considered by many as The Great American Dream. Losing your home because of current and impending financial hardships can be a tough pill to swallow. However, since mortgages are a legal binding document that are to be followed by both the lender and borrower, going into foreclosure does not have to be an option.
Since the great financial crisis of 2008, more homeowners are forced into foreclosure on their homes. This legal proceeding takes away the equitable right to ownership of the borrower on their real estate property. Foreclosure translates to the inability of homeowners to work with the lender. The number of foreclosed homes in the past few years is steadily climbing. More people are losing their homes, and sadly, these people would have had the chance to save their houses from foreclosure if they considered some of the alternatives that lenders and the government are offering to the public.
There are many ways by which you can stop a foreclosure from happening to your property. You can most assuredly stop a foreclosure from happening if only you are aware of the alternatives and solutions that are available as of late.
Here is a list of the most popular ways on how you can stop foreclosure proceedings so you can keep your home for good:
Do not feel embarrassed or hesitant to call your lender if you know that you are going to make your monthly mortgage a little late. There’s no better way to stop a foreclosure than to keep an open line of communication with your lender.
Believe it or not, banks are reluctant to file a foreclosure proceeding against their clients. Even one foreclosure proceeding will cost them a lot of money and make them lose chances for profit. To protect their best interest, banks and lending companies file foreclosure so they can still salvage of what is left from the value of a home or property. However since the current home market value is low, banks would rather offer alternatives to borrowers other than a foreclosure.
When you call your lender, it is only right to provide them with the true reason for your late or missed payments. Being honest about your current financial condition will enable lenders to work with you so you don’t end up losing your home as well.
- Work out a repayment plan
Most lenders would usually wait a few weeks before they send you a notice of default. In some states, lenders will contact you the earliest or right after your payment due date so they can remind you of your current mortgage obligations.
Although collection calls that you receive a day or two days after your payment due date seem to be irritating and off putting for some, it should be noted that under the terms of agreement, borrowers are to pay for the mortgage on or before the due date. If you receive a collection call regarding your mortgage, you can provide them the reason for the late payment. If you will not be able to process the payment, what you can provide your lender is your intent to go on a forbearance plan instead.
If you are experiencing problems such as unemployment, reduced hours at work, medical bills, and other instances that may impair you to make timely mortgage payments for a long period of time, what you can do is ask to be placed on a forbearance plan. In a forbearance plan, you will be given the opportunity to spread what you currently owe the lender onto succeeding, future payments. You can even change the due date of your mortgage until you get right back to your feet.
The year 2012 is known to be the year of short sales. More and more people are considering short sale than refinancing, forbearance, repayment, or loan modification. The HAFA or the Home Affordable Foreclosure Alternatives that was launched by the US Treasury Department under the Obama Administration in 2010 was successful in stressing the fact that foreclosure shouldn’t be an option to homeowners since there are a lot of ways on how they can better solve their current mortgage and financial problems.
A short sale is recommended by lenders and the government due to the fact that it is less of a hassle to deal with. The cost of processing a short sale is cheaper than filing for a foreclosure. In addition, lenders have realized that they are losing more money by processing foreclosures than short sales.
The HAFA program even makes it easier for lenders to encourage their clients to short sale on their property instead. This is due to the fact that they can get financial incentives by doing sol. A short sale can benefit all of the parties involved in it. The investors, borrowers, and servicers are known to receive short sale cash back incentives if a short sale becomes successful.
Banks who offer cash bank incentives give out to as much as $20,000 to a homeowner who would choose to short sell his home. The amount of incentive differs from one case to another. Although the end result of a short sale is giving up your rights to your residential property, you will be rewarded with a cash bonus out of short sale. Incentives are most often provided to individuals in lump sum so they can readily use it for relocation purposes.
If you want to know more about how you can avoid foreclosure proceedings, contact our company and our short sale specialists will be more than happy to work with you in solving your mortgage problems.
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