What is Foreclosure?
Foreclosure is a specific legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan. Formally, a mortgage lender (mortgagee), or other lien holder, obtains a termination of a mortgage borrower (mortgagor)’s equitable right of redemption, either by court order or by operation of law (after following a specific statutory procedure). (Wikipedia). It is important to avoid house foreclosure as it will effect your financial situations.
It is a bad if your’s house being foreclosure. Read this tips on how to avoid house foreclosure :-
Tips to avoid house foreclosure
1. Discuss with the lenders (especially banker) to hold the legal action. Try to do repayment plant that is affordable to your finance.
2. If you agree with the repayment, the lender might give you time and waive your obligation.
3. Add more monthly payment in your repayment plan. For example, the loan is $500 per month and you missed 5 months, it means you must pay at least $600 per month (based on your agreement with lender).
4. You need to change the loan terms. It is important to avoid increase of the interest rate.
5. Sometimes, the lender might refinance your loan. Your loan balance will increase.
That’s the way to avoid house foreclosure but if you can’t there are a few options to stop foreclosure
1. Sell your home using the credible real estate agents.
2. Try to short sale.
Sometimes, they are some reason we need to foreclosure. Many of house owner need to foreclosure because the big reason such as :-
* Retired or being retrenched
* Excessive debt and mounting bill obligations
* Have problem with co-owner
* Job transfer to another state
The law of foreclosure is different in some country. But the main reason to avoid house foreclosure is almost same. So try to avoid it.