When a homeowner cannot pay his/her mortgage des, the lender can acquire the home. Foreclosure has a negative impact on the credit stats of the homeowner and may cost his/her a lot of money he/she has invested in the home. There are some homeowners who are having difficulty in making their payments in spite of the financial crisis. Others result to bankruptcy or sell the hose to prevent foreclosure. But normally, lenders will result to an auction sale.
There can be other way…
Lenders do not want to spend their money and time on foreclosure proceedings and if homeowners can offer them better alternatives, they are likely to agree. If the homeowners miss or are delayed in their monthly payments, the lender may be willing to reconsider modification on the mortgage terms at affordable terms such as stretching the loan for a longer period of time to lower monthly payments. And if homeowner can qualify for the Federal Home Affordable loan-modification programs, the government can award qualified homeowners some financial incentives to lessen the interest rates. Either of the two options, the homeowner will end at better mortgage and financial position.
Saving money to start afresh….
When the homeowners realize that there was no other way to avoid foreclosure, they can choose to quit trying, instead of keeping up with the monthly payments that they cannot afford. They can stop and start saving the money to start afresh when the foreclosures end. Homeowners cannot be compelled to leave the house until one year. But, if selling the home cannot pay off the loans or debts, the mortgage lender may sue the homeowner.
After the foreclosure begins, the homeowner can end the proceedings when he has the money to make up the missed or delayed payments and the interest and fees. If the problem is overspending, foreclosure can be a solution to cut down the budget in other areas and manage the money to keep the home. The Federal Department of Housing and Urban Development, also called as HUD has a network of foreclosure counselors who can provide free advices about foreclosures and other related topics.
A new start after Foreclosure….
It was in the 21st century when the housing market started to drop and many homeowners realized that their homes were of no value compared to what they owe the mortgage. For homeowners with this particular situation, foreclosure can be the best solution to a problem that they can no longer contain. Some experts recommend that homeowners must consider how much equity they have in the house such as the value of the home less the mortgage loan and if it is less than 25%, consider selling the house already.
When we are in the most distressing situation, we have to find better ways rather than losing everything that we have. Our decisions today mirror what we can be and have in the future.