How to Prevent Home Foreclosure - Negotiation Tips to Stop the Bank from Foreclosing on Your House
Posted by: Guest Author / Category: CreditAvoiding a home foreclosure is possible if you take the proper steps and are willing to endure some embarrassing and uncomfortable moments. A foreclosure’s impact last much longer than the actual process itself which is why you should do everything you can to prevent the bank from taking this drastic step against you and your family.
Even though it may feel embarrassing or uncomfortable, you can typically keep the banker away by being honest and upfront about why you are missing mortgage payments. Often a banker who knows more information is more willing to work out a deal. Loan modification should be your first option. This is where the bank adjusts certain terms of your loan such as your interest rate and monthly payment to a point where it is affordable for you to make your monthly payment. Alternatively, the bank may add any missed payments to the “tail” of the mortgage.
Some banks, in the interest of avoiding foreclosures with their properties, will agree to sell a house quickly for less than its market value. This is called a short sale. It can stop foreclosure, but its probably more beneficial to the bank than it is to you. It acts very similarly to a foreclosure in terms of reducing your credit score, though a short sale will mean that you could be eligible to buy a home again much sooner.
If you find there’s absolutely nothing you can do to prevent foreclosure, then be prepared for the following process to unfold:
The bank sends out a Notice of Default after the first missed payment.
Shortly after this (at 60 days post missed payment), the lender will contact you to encourage any payment amount to help keep you current on your loan.
If you make no payments after 90 days, then the bank will commence unstoppable foreclosure proceedings.
The property is then sold at a foreclosure auction. After the sale you have two options: Either leave at your own free will or wait for the Sheriff to come and evict you.
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