Foreclosure should always be the last resort for both lender and borrower.
Not all banks and mortgage lenders work that way, but we’d love to help you get out of foreclosure, and avoid it.
You still have options, but you’ve got to get in touch to take advantage of them.
WHAT IS FORECLOSURE?
Foreclosure is when the lender forces an auction sale or takes possession of a property because the borrower is not making loan payments.
For the lender, foreclosure is costly. It is not ideal, but is necessary if borrowers aren’t responsive and communicating.
The borrower has to move from their home and damages the borrower’s credit rating. The impact can last for decades. Even when the borrower recovers from their financial difficulties, a foreclosure can make it difficult to get a loan for a future home purchase, for college expenses, or to even get a credit card or washing machine. Even if the borrower is able to get credit, they will likely have to pay higher interest rates.
HOW LONG DOES A FORECLOSURE TAKE?
Foreclosure processing times and sheriff eviction times can vary widely. It depends on the location, type of loan, if there were any inaccuracies or fraud in the loan paperwork and how busy the courts are. In a great recession it can easily take over a year. In some cases it is a matter of months or weeks.
HOW TO AVOID FORECLOSURE
Stay In Touch
One of the main reasons foreclosures happen is because borrowers do not take the opportunity to work something out with their lender. It is true that many mortgage lenders, banks and loan servicers have done poorly at serving their customers in the past. Yet, when your loan is transferred to a new lender or servicer you may have an incredible opportunity to start with a fresh relationship, with someone who really cares and can help.
When facing financial difficulties, many people just stop communicating. They don’t return phone calls or answer their mail. This essentially guarantees that the borrower will lose their home.
Instead, borrowers should make contact as soon as they know they’re going to have difficulty making their payments. Check your mail often and if you receive a call about your past-due mortgage, the best thing to do is take the call and start down the path to resolving the problem.
Even if you are in foreclosure now there may still be options. Just ask…