Getting trapped in a foreclosures situation is a very serious matter. It is not only financially challenging – it can also cause so much stress to homeowners. If you are to stop foreclosure, you must work quickly as you do not have the luxury of time.
Foreclosure happens when a homeowner becomes delinquent on mortgage payments. Lenders foreclose a property and put them on auction sale hoping to get the unpaid mortgage by the homeowner from the profit from the property sale.
Neither the homeowner nor the lender would prefer foreclosure. It may not seem so but foreclosure has its cost on both parties – not only on the homeowner.
One obvious cost of foreclosure on the homeowner is a place to live. Losing home to foreclosure means having to find a new one. That is a big cost indeed, not to mention a tainted credit record which might may it difficult to be eligible for transactions that require good credit history.
On the part of the lender, foreclosing a property means monetary cost. Approximately $30,000 is spent when foreclosing a property.
Stopping foreclosure is therefore the concern of all parties. One option to stop foreclosure is to sell the property either through for sale by owner or with the help of a real estate agent. Going for a property sale is not very simple, though.
One of the easier ways to stop foreclosure is through loss mitigation. A third party is used to help in negotiating a payment method that is suitable for both the homeowner and the borrower. The third party will make the lender agree with a lower rate and change the payment terms to make it easier for the homeowner.
One advantage of using a third party to help stop foreclosure is that they are capable of working with full objectivity. A homeowner may tend to get emotional when negotiating and fail to think straight.
Whatever workout option a homeowner chooses, it is important to keep in mind that taking measures to stop foreclosure must be done early on. Negotiating with the lender must be done as soon as possible. Acting quickly can go a long way.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.