Foreclosure prevention - Avoid Foreclosure - How to prevent foreclosure
You don't have money enough to pay your mortgage? And your lender is already looking for ways to discuss this problem with you?
In this situation it is important to stay calm and and use the following tips:
1. Don't pretend you don't have a problem.
The chances to loose the house are growing if you keep behaving as if there is no problem and do nothing to solve it.
2.Try to discuss the problem with your lender.
The lender provided a loan not to become the owner of real estate, that's why he has a possibility to help you to prevent foreclosure.
3. Don't avoid contact with lender.
In great number of cases the first notifications you get provide you with the description of the possible ways to prevent foreclosure.
So it may help you a lot. After all notifications may contain details concerning terms of legal actions. If you will not be informed about these details it will not be accepted as an excuse in the court.
4. Read carefully about all the rights you have.
It is highly recommended to look through the mortgage documents to be informed about the possible results of your financial crisis. In order to avoid bankruptcy it would be very useful to be informed about main mortgage laws in your state.
5. Be informed about the possible ways of foreclosure prevention.
Surf the internet and you will find answers almost to all your questions online.
6. Use help provided by HUD professionals.
The HUD of USA is ready to provide you an information needed for a low price.
Professionals from HUD will provide you with information concerning understanding some topics from law, will help you to deal with finances, also you can get useful tips as for conducting negotiations with lender.
7. Structure your expenditures.
Think about things which cause the biggest part of your spendings and then cut down these spendings, so you will get additional source of money to cover your loan. But it will be needed to set your needs in range of importance, so for example healthcare will be of highest importance, but such spheres of spending money as paying for TV, computer games, various entertainments are of lower importance and can become a source of mortgage payments. Paying for foreclosure should be one of the first priority expenditures in family budget.
8. Use the property you have for foreclosure prevention.
Each of us has such assets as car which we don't use, life insurance, jewelry or other assets which can be sold in any moment to solve financial problems with mortgage payments. Maybe somebody from our relatives can find a work to to help to cover mortgage payments. It will not bring you a lot of money, but it will show the lender your will to keep the home and to prevent foreclosure.
9. Don't use help of companies preventing foreclosures.
If you are suggested to pay for help in avoiding foreclosure, it is better to refuse and cover current mortgage payment with this money.
A lot of companies will try to earn some using your problem situation. But HUD specialists,information services, your own lender will proved all important information for free.
10. Don't sign any documents without reading them carefully.
If you are suggested to sign any official paper, never do it blind, look through it attentively, because you may loose your property. These documents may say, that you are letting somebody to act on your behalf. It is better to trust HUD information services in order to prevent foreclosure.
Number of foreclosure homes are growing daily. Its more than 100 millions properties in America and near 4% or 4.8 million of them have faced foreclosure. Many homeowners are lucky to stop the foreclosure process, however, there were about 500,000 homes that were listed in foreclosures for sale last year.
Post foreclosures (REO)
REO property or real estate owned property belongs to banks. How does it happen that banks own a real estate? Well, it is easy to understand: bank gives a loan, so mortgage appears, if client cant pay his dept and if there are no ways of preventing foreclosure, the home becomes the property of financial organization. It may seem that foreclosures can’t bring high profits as bank want to sell it offering the price which will at least cover the amount of the first loan. On the other hand, if you will be more attentive, you will see some ways to benefit greatly from buying a foreclosure house.
It may be the situation, when more then one loan is secured to the real estate; actually it happens quite often nowadays. In case second lender doesn’t make payments to the first lender and starts own foreclosure procedure, in this case the second lender is not part of foreclosure process any more. That is the main reason why plenty of second mortgages are valued around 20% less then the normal market price.
Bank doesn’t benefit from being an owner of a house; it needs money to flow constantly to get higher net profit. More over keeping a foreclosure as an asset may cause additional expenses. That is why bank wants to sell this burden as soon as possible, and it is likely to accept even not high price, just to cover the dept.