Though the foreclosure crisis has ended, millions of America are still trying to recover from it. In some states, especially those that involve the courts in the foreclosure process, the system is so bogged down with pending foreclosures that it will take another decade before every property currently in foreclosure is foreclosed on. In the coming years, many Americans will still be going through the difficult experience of foreclosure even though experts say the crisis is over.
No one likes the thought of losing their home; it's an extremely overwhelming and stressful experience. However, there are still a few tips homeowners can follow to make the foreclosure process a little more manageable.
Principal reduction
What many homeowners don't know is that lenders don't want you to lose your home anymore than you do, though for different reasons. Lenders lose money with every foreclosed home because even when they are able to sell the property, they don't get as much as what was still owed them. Furthermore, the lender is often stuck paying for maintaining the property until it can be sold. As a result, the lender will often bend over backwards to try to keep homeowners in their homes even if that means reducing the principal.
Loan modification
Often, the Federal Housing Finance Agency doesn't allow lenders to reduce the principal because they fear homeowners may intentionally stop making their payments in the hopes of getting a principal reduction. Another possibility however is a loan modification in which the monthly payments are lowered and the length of the repayment period is lengthened.
Short sale
When neither a principal reduction or loan modification is approved, there is a third option. Your lender might approve a short sale in which the property is sold for less than what you still owe on the mortgage and the rest is forgiven.
Communication
Many homeowners make the mistake of burying their hand in the sand and hoping that the situation will simply resolve itself. Of course that is never the case. The best course of action no matter the circumstances is for homeowners to be open and honest with their lender. Your lender is more likely to work out something with a homeowner that open to communicating.
Seek help
Sometimes despite a homeowner's best efforts, the lender remains unwilling to make any compromises. In these situations, all is not lost. A foreclosure attorney can often succeed in getting the lender and homeowner to reach an agreement where the homeowner has already failed. Foreclosure doesn't have to end with the homeowner losing the home if they consider these tips.
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Source: wiltonbulletin.com/23726/briefly-legal-what-to-do-if-youre-facing-foreclosure/
