Foreclosure Victims: Reasons and Alternatives for Foreclosure Victims- By: Julie Thompson
Foreclosure has affected many people till date resulting in a drastic increase of foreclosure victims. Not just this, these rapidly increasing foreclosures are affecting the financial system and the realty market as well. The only way to recover these bad debts is to sale the property of the foreclosure victims by organizing an auction. In this public sale, there is a possibility to recuperate these non performing assets.
A foreclosure victim is a person who suffers the legal course of action of foreclosure. When an owner purchases a home using a home loan, he deposits a security interest which is a legal agreement. When he is not able to pay the mortgage loan and misses the installments, the lender takes a step against the owner and files a lawsuit against him. At this point, the owner is termed as a Foreclosure Victim.
However the foreclosure victim is given a chance, when a notice is send to him, as a warning, to take a step to stop foreclosure. If in any case, he does not respond to the “Notice of Default”, a court order called “Right of Redemption” takes action in which the whole property that was actually the security interest is taken back by the lending institution in a period of two to three months.
There may be many reasons due to which the foreclosure victim might not be able to make the payments of the mortgage loan. For instance, being without a job, death of the homeowner, financial crisis, divorce, transfer to other state and interest rate hike to name a few. All such causes raise the reasons for the Foreclosure victim to make default payment. The foreclosure victim and his family are badly affected as they need to vacate the house on a short notice.
Foreclosure victims can opt for several alternatives like short sale, deed in lieu of foreclosure, loan mitigation and hardship letter to name a few. Hardship letter is a preventive measure that can make a way out for the foreclosure victim and he can stop the course of action.
In this letter, the foreclosure victim brings up all his problems, which he is going through including all the reasons for default payments and expects that the lender will cooperate and find a middle ground. The Loss Mitigator reads the letter and decides whether to facilitate the foreclosure victim or continue with the course of action. The owner can mention some major points that can be negotiated like to reduce the installment size, pardon a few installments, helping in short sale, extend the loan period or provide time for paying installments to name a few. This will help the owner to come out of his problem and ultimately will stop the process of foreclosure.
There are several options that are provided on the internet, which can also lend you a hand in coming out of the huge problems of foreclosure. So if you want some information regarding dealing with foreclosures, do not forget to surf the internet as well.
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