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My house has been foreclosed: what now?
Today, foreclosure is a huge issue in regards the real estate
market. So, what exactly does foreclosure mean? Suppose, you have
taken a loan from your bank, and you secured it against your home.
You have been making regular repayments but fail to make a
particular repayment on time and this problem keeps recurring over a
period. In such a situation, the bank or some other financial
institution, from whom you have taken the loan, may forfeit your
home legally. Now, they sell your home to make up for their loss
and, eventually pays off your other debts, if any. This legal
procedure of selling a fixed property is known as foreclosure.
Most lending institutions are willing to work with their customers
and will give some basic foreclosure information to them in order to
come to an agreeable solution that does not include repossession
proceedings on their homes. The property owner needs to ask their
lenders exactly how they do their foreclosures if no other solution
is available. There may be instances where a lender is willing to
take a lower payment for a brief period of time to keep the loan
from getting any deeper into default.
If you know that you are not going to be able to save your property
from foreclosure, then you need good information to be aware of the
many different options you have in order to protect your credit. One
of the easiest things to do is request a chance to sell your home
before it goes up for foreclosure. Many lenders are willing to allow
their customers the opportunity to put their house on the market and
sell it for a price that is agreeable to all parties.
What are your alternatives, when faced with bank repossession of
your home? Surprisingly there are quite a few. Firstly you can do
what is known as a pre foreclosure loan. This is when you find an
investor to pay off your present loan and take over the title of
your home. This can be a family member or an agent interested in
selling your home for monetary gain. If it is an agent they will
sometimes pay you a little more and you will make a small profit. In
this way you will both win. You will save your home from being
repossessed and the agent has made a nice profit. Of course the
agent will come out better monetary wise. The lender is happy
because he got back his money and will not be stuck with a
repossessed house to auction.
Other foreclosure information includes using a reverse mortgage.
People over the age of 62, who are looking at a repossession of
their property, may have the option of securing a reversed mortgage
to pay off the debt. Basically what a reversed mortgage does is take
the current equity in the home or property and turn it into usable
cash without having to secure another debilitating loan.
Other useful foreclosure information consists of documenting
everything. No matter what else happens, make sure you document
every conversation with your mortgage company that you have.
Repossession procedures usually take three to six months to run
their course from start to finish. As long as you remain in contact
with your lender and are either; making an attempt to work out an
agreeable arrangement to bring your mortgage to date, to pay lesser
amounts as agreed. Or attempting to sell your home, you have a legal
leg to stand on if for some reason you need to fight the lender in
Another alternative to bank repossession is a stop foreclosure loan.
This can be done if you are not in a very bad financial
circumstance, but need a break with your monthly payments. With this
loan you will pay off your first loan and start a new one. If you
have been paying your house payments for a little while, this could
work in your favor. Because the principle will be smaller it will
make the monthly payments less. This will certainly ease your
financial situation and allow you to get back in control.
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