Foreclosures - How Serious Is It Really?
Foreclosures are very common, and this is largely because people don't know how to avoid them. When the bills arrive on their doorsteps, their initial reaction is to ignore the bills and hide from their lenders. This is not the best thing to do because it's just hiking up the interest rates of the home loan. At the end of the chase, once your lender gathers enough reason to believe that you have no plans to pay for your home, you will have to face the wrath of foreclosures.
What goes on
Foreclosures don't just happen. Most of the time, they're just the results of months of unpaid home load dues. The foreclosure proceedings begin once a "notice" has been sent to the debtor. This can either be sent through mail, published in newspapers, or both. Whether it's sent through mail or not, the borrower will need to attend an initial foreclosure hearing with the lender. If s/he fails to do so, s/he will need to give up his/her right to be heard.
Foreclosure terms may vary depending on the order of the state court. Generally, it runs about 180 to 300 days. Within this time frame, the lender and the borrower are supposed to come to terms with each other. Most of the time this ends up with the debtor being evicted from his/her home. However, a foreclosure may be dismissed if the debtor is able to pay the full amount of the debt, or if s/he strikes up a reasonable agreement with the lender.
Even if you don't lose your homes in foreclosures, you still suffer from the consequences of facing one. First and foremost, it's embarrassing to have the whole neighborhood know that your home is being put up for public bidding. Secondly, you won't be able to apply for loans for several years after a foreclosure. This can be a huge problem, especially if you're trying to raise a family.
How to avoid foreclosures
Ironically, the only way you can avoid your home from being foreclosed is to make sure that you have a very good relationship with your lender. It's normal for people to face big tragedies in their lives, and your lender will understand this. Even banks give leeway for huge tragedies like deaths or accidents in the family. If you're having financial trouble paying for your bills because you've recently lost your job, all you need to do is to call up your lender and ask for pardon.
Although it's possible, it's highly unlikely that your lender will "forgive" a portion of your debt. However, your lender can come up with a more manageable payment scheme for you. For example, s/he can let you pay for the debt for a longer period of time. Of course, this can end up being more costly than the initial loan at the end of the term. However, it will let you meet your obligations without putting your home at risk.
Banks offer these refinancing schemes all the time, and you shouldn't be too embarrassed to ask. Banks prefer this set up too, because when a home is foreclosed, they usually need to sell it for prices lower than its original worth. To avoid having to uproot your family form your beloved home, ask your lender about home loan refinancing options.
What goes on
Foreclosures don't just happen. Most of the time, they're just the results of months of unpaid home load dues. The foreclosure proceedings begin once a "notice" has been sent to the debtor. This can either be sent through mail, published in newspapers, or both. Whether it's sent through mail or not, the borrower will need to attend an initial foreclosure hearing with the lender. If s/he fails to do so, s/he will need to give up his/her right to be heard.
Foreclosure terms may vary depending on the order of the state court. Generally, it runs about 180 to 300 days. Within this time frame, the lender and the borrower are supposed to come to terms with each other. Most of the time this ends up with the debtor being evicted from his/her home. However, a foreclosure may be dismissed if the debtor is able to pay the full amount of the debt, or if s/he strikes up a reasonable agreement with the lender.
Even if you don't lose your homes in foreclosures, you still suffer from the consequences of facing one. First and foremost, it's embarrassing to have the whole neighborhood know that your home is being put up for public bidding. Secondly, you won't be able to apply for loans for several years after a foreclosure. This can be a huge problem, especially if you're trying to raise a family.
How to avoid foreclosures
Ironically, the only way you can avoid your home from being foreclosed is to make sure that you have a very good relationship with your lender. It's normal for people to face big tragedies in their lives, and your lender will understand this. Even banks give leeway for huge tragedies like deaths or accidents in the family. If you're having financial trouble paying for your bills because you've recently lost your job, all you need to do is to call up your lender and ask for pardon.
Although it's possible, it's highly unlikely that your lender will "forgive" a portion of your debt. However, your lender can come up with a more manageable payment scheme for you. For example, s/he can let you pay for the debt for a longer period of time. Of course, this can end up being more costly than the initial loan at the end of the term. However, it will let you meet your obligations without putting your home at risk.
Banks offer these refinancing schemes all the time, and you shouldn't be too embarrassed to ask. Banks prefer this set up too, because when a home is foreclosed, they usually need to sell it for prices lower than its original worth. To avoid having to uproot your family form your beloved home, ask your lender about home loan refinancing options.
