Loan Modification Does Not Stop Foreclosure Process in Most Cases- By: John Cutts
Increasing number of homeowners had reported that they lost their properties to foreclosure despite being in the middle of negotiating for a mortgage modification with their lenders. According to housing experts, the act of negotiating for a modification does not stop foreclosure process in most cases, with lenders continuing to pursue foreclosure and selling off properties while negotiation is ongoing.
Experts stated that this is one of the most negative aspects of the housing market crisis, where troubled homeowners who are hoping to save their properties through modification are taken by surprise by lenders who continue the process of foreclosure and sell off their homes even before the modification attempt has reached its conclusion.
There have also been reports of homeowners being evicted from their properties while in the process of negotiating for a mortgage modification. In other cases, families just pack up their belongings and leave before banks can repossess their homes. Housing data showed that over 2.5 million houses in the U.S. have been foreclosed or repossessed by banks since the housing industry crisis started in December 2007.
Experts also noted that thousands of properties already have a foreclosure date set for them despite their owners' ongoing negotiation with lenders in an effort to stop foreclosure process. In such a situation, housing experts reveal that homeowners are left with no choice but to let go of their homes or file for bankruptcy protection. This option is used by some homeowners and it is quite common for some borrowers to file for bankruptcy minutes before their properties are set to go for an auction sale.
Foreclosure lawyers have revealed that in foreclosure cases, multiple notices of eviction should be served to the homeowner. However, they claim that majority of Americans vacate their homes even before the actual repossession takes place. Once a repossessed property's locks were changed, the previous owners are given 24 hours to gather their personal belongings, but lawyers reported that majority of foreclosed homeowners do not even bother.
According to housing market analysts, because negotiating for a mortgage modification does not stop foreclosure process, the number of homeowners who lost their properties to foreclosure has risen faster than they should than if borrowers are given the chance to complete the modification process.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.