How to prevent a foreclosure on your home

Are you falling behind in monthly payments on your home? Then your lenders may demand you foreclose. Here are some tips that can help

First and foremost, contact your lender as soon as possible. Do not put off contacting the lender until it is too late. No lender likes to foreclose because contrary to your belief, it cost as much as 25% to foreclose and hence, a foreclosure is usually a last option by the lender. By avoiding the lender, it suggests you have a desire not to meet up your monthly obligations which will lead to your being blacklisted by the lender.

In a situation where your lender is from out of town, it is advised you make a long distance call which is insignificant in these days. And you can even go the skype route to save further on costs. Alternatively, just send an email. Most, if not all lenders have a website nowadays.

Secondly, be open with you lender. Do not lie. Be 100% truthful. If you have been laid off, state so. If it is an expensive divorce settlement, state so. This will provide your lender with data to work with.

Third, you can have a refinancing done in the event there is some existing equity on your home. Borrowing against this equity can be used to offset the monthly mortgage payments until your financial situation improves.

Fourth, you may consider selling your home before your monthly commitments become a problem. This is a very smart move but will only prove timely if the housing market is strong. But where the market is weak, it may take a while to offload the house except you are prepared to make substantial reductions in its real market value in order to achieve a quick sale. The price reduction need not mean that there is no equity still existing in the house! So you can make a little profit as well.

What is crucial about selling in this case is that it forestalls a situation where you have a negative rating with your lender.

Declaring for bankruptcy is another option. This however should be avoided as much as possible as it will damage your credit record and it takes several years for it to be repaired. The only good thing is that foreclosure proceedings are suspended until your bankruptcy has been concluded

How To Prevent A Wrongful Foreclosure

Nobody ever wants to have his home foreclosed but circumstances beyond ones control such as increase in mortgage rates, unexpected medical bills, expensive divorce settlements throws unwary soul into that financial quagmire.

However, there are circumstances where foreclosure may be wrongful caused either by a glitch in the lenders computers or perhaps out of bad intentions. Such wrongful foreclosure can and should be fought against and these are the steps that can be taken.

First of all, take all correspondence from your lender seriously. Nothing should be overlooked. I remember once, speaking from another context when I received a notice from paypal and thinking it was a spam, refused to read it and it almost cost me my account! It is therefore important to take all correspondence from your financial provider seriously especially if you are indebted to the institution. Ignorance is not an excuse before the law!

From the mails received from your lender, it will be easy for you to notice any glitch from your lender.

For instance, if you were threatened with a foreclosure but found you were paying higher mortgage rates than you otherwise should, you can demand for a refund of the excess charges from your lender and benefit from paying lower rates.

All the same to have a foreclosure declared as wrongful, you will need to prove there is a glitch somewhere. You will need an expert to confirm what exactly the defect is and where the fault is from. This will mean consulting a lawyer and examining the paperwork given to you by your lender.

What you really need is knowledge and with that knowledge you can prove that there has been a wrongful foreclosure. An expert is the best option on choosing what the defect is.

2.2million homes faced foreclosure filings in 2007. This is more than 50% higher than the 2006 figure.

The city of Detroit led the pack. The four states of California, Nevada, Michigan and Florida were the hardest hit. California is not a surprise because it has the largest U.S population but also a very weak regulator whose poor oversight led to reckless lending by Lenders in the state.

Now what happens after foreclosure high of 2007?

Hopefully, 2007 may be the peak due to the rate cuts by the Feds in order to stave off a recession. Let’s hope this dissuades lenders from resetting rates. This will be a real reprieve