No one wants to lose a home. For most people, it is the investment of a lifetime. Whether it is a simple structure or a magnificent and luxurious property, it becomes a part of a homeowner’s existence. It is, therefore, natural for one to exert all efforts possible to avoid a foreclosure.
Technically, a foreclosure is the legal process by which the lender, which can be a bank or any other entities, gets to reclaim a property from the borrower. Usually, anyone who borrows money for the purpose of buying a property, which can be a vehicle of any sorts or a house, takes the full responsibility of paying for it with the amount and on dates specified in an agreement between the two parties. When a payment or two are missed, the lenders have the right to proceed with a foreclosure.
Foreclosures can be initiated in a number of ways. Once the loan is determined to be in default, the lender can proceed to inform the borrower about it and about the fact that the property is going to be seized at a set date. This date does not fall on the date of notification though for the purpose of giving the borrower a chance to make up for the missed payments or decide to put the property on sale and consequently cash out the equity.
If losing the house is not an option, which is true for most of the population, there is actually still some hope. A Notice of Default or a Lis Pendens in FL is sent by the lender to alert a borrower of a foreclosure. Being homeless is not the only option available at this point though.
The best thing one can do when faced with the probability of a foreclosure is full reinstatement. This entails settling everything with the lender and paying off all of the arrears completely. A good amount of money is needed to accomplish this, but if one has the resources needed to acquire the finances, then this can be the perfect solution to the problem.
Probably the best option for the homeowner in dealing with a foreclosure is a loan modification. This basically involves a negotiation between the homeowner and the lender regarding the possibility of lowering one’s monthly payment. In this option, it is possible to include a third party who can proceed to settle the home loan at a lesser amount than the original. The current value of the property vis-a-vis its value at the time the loan was taken out is compared. The borrower may also request that the lender allow upfront payment for arrears as much as the borrower can afford. The remaining amount is then arranged to be paid on a new installment plan.
Another option to stop a foreclosure is bankruptcy. This damages one’s credit yet comes with a chance to keep the home. In most cases though, the foreclosure is merely postponed and not really stopped when bankruptcy is declared.
With these different things one can choose to do, it is still possible to prevent foreclosures and have a roof over one’s head at the end of the day. It is, however, a must for one to study each option to see how if it answer’s one’s problems to a tee.