It is virtually impossible to go through a day without reading something in the news media about our current economic problems. Many newspaper stories and video reports mention bankruptcy and foreclosure in a rather depressing way. Gaining control of your financial obligations is a much more preferable alternative to becoming the next bankruptcy victim for those of us who have financial commitments in the form of loans from a bank or loan provider.
If you have taken a loan by pledging your fixed property like your house as mortgage from a lender then you should know what the consequences are in case you miss the payment of loan installments in time. You should know what foreclosure is, connected with non payment of mortgage installments and from which point of time your mortgage company initiates foreclosure procedure against you.
If you have failed to make a payment on your home loan for the first time, the action taken will be light. The foreclosure procedure is initiated with a delinquent payment notice through an attorney. This notification is a warning signal to the homeowner, to catch up on the monthly payments. The homeowner is often able to contact the lender to create an extension for repayment of the loan.
At this early stage of the crisis, the mortgage company has the option of giving you easier terms to make your payments. But if they choose not to go easy on you for whatever reason, or if you default for a second time, then you may find yourself in a position where losing your home is a real possibility.
When you become a defaulter for second time then the mortgage company will not hesitate to send you a legal demand notice and from here onwards you are responsible for the legal expenses of the mortgage company and your burden will be more with late fee penalties. In a foreclosure procedure a mortgage company can demand repayment of the full amount in lump sum and from here it is a Herculean task to escape from losing your home.
Lump sum or full payment is an important clause in any mortgage contract which is called an acceleration clause. Once the acceleration clause comes into effect then you will be left with only two options- either repay the full loan amount in a single installment or face final foreclosures procedures. Now the local sheriff will send a certified letter to you about the foreclosure of your property.
From this point on, there will be several legal proceedings leading up to your home being auctioned off. You will be unable to do anything other than to watch your dream home bought by a complete stranger without your approval.
Does the possibility of a foreclosure procedure fill you with worry and doubt? Foreclosures procedures might have once seemed remote, but is now quite likely. However, there are ways to avoid losing your home. Should you find yourself with money difficulties, consider investigating renting it back. Remember though, you aren’t guaranteed to be able to repurchase your home. That choice rests with the current owner and is also dependent upon your fiscal condition. Obviously, certain buyers are more reliable than others. Don’t sell until you’re satisfied that you have learned what your buyer’s intentions are.
- Jill Borash
This entry was posted on Sunday, March 22nd, 2009 at 12:03 am and is filed under Finance, Foreclosures, Mortgage, Real Estate. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.
