How do you know if Foreclosure is looming?
Have you missed a mortgage payment? Or maybe three? Three missed payments is the point at which a bank can file a foreclosure lawsuit, sometimes called Notice of Default or Lis Pendens. This is the point considered “pre-foreclosure”. Most people don’t purposely chose to default on their mortgage, some common situations that instigate a pre-foreclosure are death, divorce or separation, sickness, job loss, and even credit card debt.
What are the stages of Foreclosure?
There are three stages in the foreclosure process. The first is pre-foreclosure, as mentioned above when the borrower has missed three mortgage payments. In this stage the borrower can take steps to change their situation in a number of ways, which will be discussed below.
The second stage of foreclosure is the Trustee Sale, or Public Auction. If the borrower is not able to come to an agreement with bank in the pre-foreclosure stage, the bank will bring the home to public auction in hopes of selling it to a third party and recouping their money from the property.
The third stage of foreclosure is when the homes not sold at public auction go back to the bank, called REO or Real Estate Owned. This is the final stage of foreclosure and can cost the bank up to $50,000.
So what can you do to avoid foreclosure?
Thankfully, there are many steps you can take to avoid foreclosure. The most desirable choice would be to avoid the situation completely by making sure you have properly budgeted for and can afford your mortgage payments.
Alas, even this forward thinking cannot always prevent foreclosure, so what can you do when you find yourself in the pre-foreclosure stage? Talk to your lender. This is the most important step to take. There are many options you can arrange with your bank if you are upfront with them about your situation. Some actions they may suggest include; paying the loan in full or bringing the past-due payments current along with any attorney fees, negotiating with the bank to modify the loan or create a repayment plan, refinancing the home, selling the house, and working out a short sale with the bank if you owe more than the house will sell for on the market.
Remember, the bank does not want your home, it costs them money. They do not want you to default on your loan, so the most important step you can take if foreclosure is looming is to talk to your bank.
Sadie Scott writes on marketing and business related issues. You can learn more by visiting my blog, Foreclosure and Real Estate Investing
http://foreclosure-info-and-options.blogspot.com/
Posted in 
Tags: 
