Home Foreclosure Options
Bank foreclosure is a devastating thing. You will not only lose your
home but a lot more. Your credit record will be destroyed and you
will find it very difficult to borrow any loans to help you out in
the future. However sometimes this is your only alternative. When
you receive the letter of repossession you will need to act fast and
make a decision. Firstly remember that you do have some options but
these will depend on your financial situation. If your problems are
only temporary then do consider these options before having to face
repossession and all that comes with it. However if you see no
improvements in your financial situation then repossession may be
your only alternative.
Most lending institutions are willing to work with their customers
and will provide 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
accept a lower payment for a brief period of time to keep the loan
from getting any deeper into default.
Bank foreclosure means that you have failed to pay your monthly
payments and the bank has given you a notice that unless you can
obtain the money owed they will reclaim your home. This is quite a
shocking thing to have to face. However do not panic but know what
your options are. As soon as possible go and talk to your lender and
be honest and up front about your financial position. They will be
happy to work with you, as they do not want to be stuck with a
repossessed house.
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 minor 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 options include 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.
Some lenders offer the property owners a redemption period. This is
a period of time after the bank has repossessed the house and the
homeowner has to find a way to pay the debt in full, whether by
refinancing or sale. Usually eviction proceedings follow after the
redemption period is offered. The best thing anyone can do when
faced with foreclosure is to stay in contact with their lenders, so
that they can examine what legal options they have in saving their
homes. This will enable them to work out an agreeable solution
between themselves and the bank. If you don’t ask for the
information on your foreclosure, the help won’t come to you.
Remember, saving your home may be as simple as making a phone call.
It’s also very useful during a foreclosure to document 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 stay in contact with your lender and
are either; making an effort 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 court.
Always remember that the bank does not want to foreclose on your
property any more than you do. This is because they stand to lose
money. When your house goes up for auction, the lender will be lucky
if they can get their investment back, as houses go very cheap.
Everyone loves a bargain, even if it is at someone else’s expense.
Take advantage of this situation and after you miss a couple of
payments talk to your lender about reducing the monthly payment.
They may very likely work with you so they can protect their
investment.
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