Foreclosure affects millions of individuals nationwide. The devastating effect is that ownership of an individual’s home become threatened. While foreclosure can be caused by many reasons, in the event that an individual faces foreclosure the best and most basic advice is to act now. By consulting with understanding legal counsel, an individual can learn about the various options that are available in this dreadful situation.
Beware of Scams
Individuals faced with a foreclosure can easily make a grim situation worse by falling for a mortgage scam. Anyone who absolutely guarantees a mortgage modification is often either a scam artist, or hopelessly misled, or both.
A Chapter 7 bankruptcy provides individual the opportunity to leave a home without being forced to pay the foreclosure deficiency between what is owed and the price for which the home is eventually sold.
A Chapter 13 bankruptcy stops the foreclosure process and provides the time necessary to allow an individual to get caught up on payments. In many cases, it is possible to eliminate or lower financial obligations to allow funds to be dedicated towards mortgage rather than other types of debt.
How The Foreclosure Process Occurs
Foreclosures tend to follow a similar pattern. It is usually not a quick process. A foreclosure begins with the mortgage holder providing the defaulting homeowner with written notice of default. The homeowner is then given a limited amount of time in which to remedy this default and pay all outstanding amounts. If the specified period of time elapses without the default being remedied (or “cured”), the mortgage holder will likely provide notice of a foreclosure sale. The property in question may either be sold at a public auction or the lender may purchase property to later sell the property at a private sale. If the individual still resides at the property at this point of time, the mortgage lender will likely then file an eviction action.
Available in some situations, mortgage modification allows individuals to modify the terms of a mortgage loan to lower monthly mortgage payments. It is worth remembering that mortgage modifications are not available for individuals in every situation.
Negotiate a Workout
Individuals can avoid a workout by negotiating a foreclosure situation with a mortgage lender. An attorney can prove especially helpful in assisting clients throughout this process.
Refinance a Loan
Although refinancing a loan can be difficult when individuals are faced with a foreclosure because banks are unlikely to consider such a risk. Refinancing requires an individual has equity in a property, good credit, and an upward value curve in the area where the property is located.
A “short sale” is a sale of a property in which proceeds fall short of what the property owner still owes on the mortgage. While a short sale is a way of avoiding foreclosure, the seller will not be able to remain in the home.
Retaining the services of experienced legal counsel often proves beneficial both financially and emotionally. Even if foreclosure cannot be avoided, legal counsel can help ensure that an individual remains at home as long as possible.