Many people in the U.S. are facing the situation of foreclosure. Before drilling into details, let’s have a look at a comprehensive definition of foreclosure.
“Foreclosure is the result in the event where a borrower fails to make timely payments for their mortgaged properties. The mortgaged property, in such a situation, is possessed by the lender.”
There is a myth related to foreclosure that the lender or the bank initiate the procedure of foreclosing as soon as the debt period expires. There is absolutely no truth in it as the lender always wants their money back. In the event of foreclosure, the lender also has to forego the interest accumulated on the principal amount. Furthermore, the process of foreclosure is a time-consuming one hence the lender may have to wait for a long period of time before getting their money back. A lender only opts for the option of foreclosure when there is no hope of recovering their money.
There can be various options for the borrower to avoid the situation of foreclosure despite having received a one-week ultimatum from the lender. The first way is to talk it to out with the lender and work out a payment plan. The borrower can request the lender to schedule a late payment date. In most cases, the lender has nothing to do with your mortgaged property; all they want is their money back, along with accumulated interest. Hence, there are greater chances of them scheduling a future payment date. In the case of failed negotiations with the lender, the borrower can consult a foreclosure consultant who can assist in finding the possibilities of avoiding foreclosure and earning a bad credit on the borrower’s name.
It is true to a certain extent that there are very slim chances of a borrower obtaining another home loan after a foreclosure situation. Many banks or lenders will feel reluctant to grant you another home loan after foreclosure. Moreover, the property that is foreclosed is auctioned for an amount that is lower than the actual value; hence, the borrower is still responsible for making the outstanding amount.
If in an event, the lender is threatening the borrower to send them to jail in case of nonpayment, the borrower can file a formal complaint against them. The lender has only the right to possess their mortgaged property and ask for the outstanding amount and interest (if any). They cannot send the borrower to jail under any circumstances.
The long and short of this story is that foreclosure is a process that a borrower must avoid at any cost. Apart from giving you a bad name in credit score, it also makes it difficult for them to avail another home loan. Hence, it is recommended to make timely payments if you have mortgaged your property to avoiding landing in such unfavorable circumstances. If you can’t make your payments or are facing foreclosure there is another option, and that’s a cash offer. Companies like BuyMyHouseToday.com, HomeOfferASAP.com and LightningHomeOffer.com can offer competitive solutions to your home selling problems.