Understanding the Foreclosure Process

Many people are finding themselves in a situation where they are unable to afford their house payment. If you are one of them, take heart that you are not alone and that there is real help for you. Before you can deal with with this you must understand the process. The lender doesn't want your home if it's possible to work something out. Quite frankly, they'd rather you make the payments. So what happens in a foreclosure and what can you do to stop it?

It's crucial that you communicate with your lender before you find yourself behind in your payments. The lender will be easier to deal with if you are up front about your situation. You might work out a plan that helps you maintain your home ownership and your credit. If you are past this point then here is what will likely occur.

First, (read your mortgage documentation) the lender will notify you normally if you are late with your payment 15-30 days after the due date. The frequency of notification will increase as time passes. After 90 days, with no communication, the lender will normally refer the loan to an attorney to begin the foreclosure process. The homeowner is given the foreclosure notice through a "Lis Pendens" (suit pending) document. The home will be sold to satisfy the loan and any deficiency (shortage) will be the responsibility of the borrower (you). This process can take from 5 months to 1 year.

There are alternatives to foreclosure and each will require you to communicate with the lender and make every effort to comply with their procedures. it is important to understand that the loan you originally agreed to has more than likely been packaged with other loans and sold to a third party. This complicates the process but you must continue to make every effort to communicate with the company servicing your loan. One of the alternatives to foreclosure is "Deed in Lieu of Foreclosure". This basically turns the property back to the lender without the added expense of a foreclosure in the local court system. Another method is to sell the property "short". If the lender agrees, the property is sold for less than the amount owed. The deficiency is still your responsibility, but this is slightly better for your credit.

All of the various methods of handling a foreclosure, (besides making your payments on time) will have a negative impact on your credit. Some are a little less damaging than others. We have seen many homes left in horrible condition as a result of the anger and frustration of a homeowner facing foreclosure. If a lender has to make many repairs to the property in order to sell it, it will delay the sale and as the market declines, your shortage will increase as the sale price is reduced.

Be careful because there are some companies looking to prey on your unfortunate situation. If someone wants you to sign anything or make payments to anyone other than the lender, consult an attorney or it might cost you more than your home.

If you are looking for ways to avoid foreclosure, we have compiled some research and put together some information you can use. You must act before it's too late.

Save your home from foreclosure by visiting: http://StopForeclosuresGuide.com Article Source: http://EzineArticles.com/?expert=Mark_A_Wagoner