Foreclosure refers to the process that happens to a homeowner once he fails to make payments for a mortgage. This is a legal process through which the homeowner forfeits all the rights to his or her property. If the homeowner is not in a position to clear the outstanding debt or sell his property through a short sale, then the property will go to a foreclosure auction. In case the property doesn’t sell in the auction, the lending institution will repossess it in order to get the money they loaned to the homeowner. The lending institutions can be cruel and heartless, but there is always enough time for you to sell your home and pay off their loan before they take your home away and also ruin your credit score.
So just in case you have been missing your mortgage payments, you should be very cautious. If you are facing foreclosure, time is of the essence since the foreclosure process in most states moves very quickly. The following are some of the queries most homeowners have and the available options for you when facing foreclosure.
Who Can You Call?
The first step to take when you have any queries regarding owning a home even when it has nothing to do with missed payments or foreclosure is to talk to your nearest homeownership counselors. There are many lists of agencies, organized and approved by the state to advise home owners on various aspects regarding homeownership, including mortgage delinquency and default resolution at no cost to the homeowner.
Some of the agencies that specialize in mortgage delinquency usually have foreclosure prevention counselors who are well able to analyze your current financial situation to determine whether you qualify for any programs that will assist you to lighten your load. These counselors can at times communicate with your lenders in order to discuss your refinancing and modification options.
When Should You Act?
The local or state laws vary in the process and the length of the foreclosure, so it is very crucial to enquire early on in order to ensure that you don’t miss your chance to contest your lender’s claims formally in court. If you are already facing foreclosure, you should consider hiring an attorney to formally contest on your behalf and allow for litigation to move forward. Acquiring an attorney at an early stage is very important since it is easier to stop a foreclosure than to get your home back after the foreclosure.
What are Your Loan Options?
It is very possible to reach an agreement with your lending institution in order to avoid foreclosure and also establish the best way to pay off what you owe. The following are some of the loan options available to homeowners:
- Loan Modification
This is a chance to negotiate with your bank and agree on a payment plan that is more affordable for your existing mortgage.
- Refinancing
This is typically the optimal situation although it will not be an option if you have defaulted on your current mortgage payments.
You can file for bankruptcy in order to prevent your lender from taking away your home. The lender will instead give you an opportunity to negotiate with them and come up with a payment plan that will relieve you from the debt. But you have to qualify for bankruptcy so that it can successfully protect all your assets.
In case you can’t afford a loan modification or refinance, you can sell your house to pay off the mortgage and protect your credit status which is an important thing to do.
In case you are facing foreclosure, seek the services of a homeownership counselor in Houston to guide you on how you can protect your home from being taken away by the lenders.