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Foreclosure Tips and Advice
By Susan Willets | August 31, 2008
If Only I Had Known - Foreclosure Tips and Advice
Home foreclosure rates are fast on the rise. Foreclosure in the news reports that the national crisis has sprung from a number of factors: people signing up for interest-only or graduated interest/adjustable rate mortgages, and common unfortunate life factors that deem homeowners unable to make monthly mortgage payments. Divorce, unemployment, illness, etc. are all common reasons for defaulting on your loans. Whatever your particular predicament that has led you to imminent foreclosure, here is a quick run-down on all you need to know about the foreclosure process: from foreclosure tips/advice, the foreclosure process, and what to watch out for.
Foreclosure on your home can — aside from popular belief — occur after just a few missed payments, and can leave you homeless shortly thereafter. What is significant to recognize though, is that approached correctly, a homeowner about to be foreclosed upon can save their home by acting quickly, contacting their lender, and finding a lawyer to represent them. If nothing is done, here is how the foreclosure process will work out:
- Once you have defaulted (each lender has a different definition of default: from 1-6 months typically) on your mortgage payments, you will be sent a certified “Intent of Foreclosure” document from your lender, with dates of their intended action.
- Under law, the lender is forced to publicly announce this intent of foreclosure — typically, an announcement will be made in the local newspaper.
- You will typically be given a small window of time to contact them to make full repayment of your mortgage — as noted in the letter. This is the time that, if you have any way of paying them, you should. Call relatives, tap savings accounts, etc. — anything you can do to avoid court and subsequent auction of your home is recommended now.
- If repayment is not scheduled, the lender will then take you to court, where the judge will render your home foreclosure valid; and a date for public auction of your home will be scheduled. Note: Only in the rarest of situations will the judge not find for the lender.
- Once your house is auctioned, you will be required to leave your home. Depending on the auction price, you may recoup home equity; or conversely, have to pay a deficiency. Your lawyer should make you aware of both possibilities.
What To Do To Avoid Foreclosure
If you have done any research about foreclosure (articles about foreclosure, industry reports, etc.), you know that the first and most significant word of advice from anyone who has gone through a home foreclosure is to contact your mortgage lenders as soon as you fear you may default on your mortgage. Even if you have already defaulted on your mortgage payments, calling your loan institution never hurts. More often than not, the lender will want to work with you, so that they can recoup their money and avoid the timely and expensive concerns of court. In most cases, mortgage lenders want to avoid court as much as you do; so make sure to call them and ask about any sort of programs, advice, and breaks they may be able to help you with to keep your home. It is always better to confront the issue, especially if your home is at stake.
Secondly, research and contact an attorney specialized in foreclosure and debtors rights to save you from any third party foreclosure help scams. A good foreclosure attorney will make you aware of your rights, what to expect in home foreclosure, and also how to best treat the situation of foreclosure. An attorney will save you a lot of grief and concern, and do everything in their power and expertise to help you mediate with your lender, and keep your home.
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