How about a dirty word that is not four letters long - "foreclosure." It certainly is not a word that engenders happy feelings. In general, people finding themselves in a foreclosure situation have suffered a substantial change in their life like divorce, serious illness or job loss. During these times in can be difficult to muster the energy to take proper steps to avoid a home going into a foreclosure. There are, however, proactive measures that can be taken to maximize the chances of keeping your home.
The first rule is overarching - talk to your lender. It can be difficult to actually reach out the bank or lending institution for a variety of reasons. You might be embarrassed that you are having money trouble and missed payments or you might be really angry at the bank if you perceive they are unjust in some fashion. Overcome your inertia no matter what its cause, give the bank a call and explain what is going on in your life and why you have missed payments. They may be willing to work with you during your difficult time.
The fist way a bank might accommodate you is by forgiving the missed payments. In this instance, the bank will simply waive the money due. Although this is a great solution for a borrower, it is rarely granted.
A second method is forbearance. The bank might be willing to give you a period of several months to become current on your loan before they file legal proceedings. In this fashion, you are given breathing room and the opportunity to make things right. This method can be coupled with changing the terms of your loan.
Your loan can become more manageable by changing its terms. The two common methods are by lowering your interest rate or by extending the timeframe of the loan. Both methods cause your monthly payment to be lower. How much and to what degree will vary depending on your specific circumstances.
With all three methods the key is actually calling your bank. Unfortunately, not every bank is willing to work with its borrowers and you may end up in foreclosure proceedings regardless of your efforts. In the end, talking to your banker sooner rather than later can't hurt and may help quite a bit. Don't be shy - call your bank as soon as you miss a payment. Keeping your house may depend on it.
For more information on foreclosure please visit www.kanzerlaw.com.
Article independently authored by Eric Parish. The content herein may or may not reflect the views and opinions of Kanzer Law.
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