No one wants to face a foreclosure, a foreclosure happens when a borrower fails to make his or her monthly payment on their mortgages. This can be caused by a variety of reasons such as loss of employment, divorce, economic hardship due to medical expenses and other spending habits. Before facing a foreclosure, the first step is to contact the lender. Let them know about your situation and that you’re having trouble making your monthly payments. Many times a lender is willing and able to work things out through a payment plan that works for you rather than assuming that you are not interested in paying them. The lender has put their trust in you to pay your payments but when that cannot happen, arrange an appointment either by phone or in person to discuss your options. There are options out there that can alleviate or eliminate foreclosure. Every homeowner has options that they may or may not be aware of. Homeowners have rights and one right is to shop around for the best interest rates and principal rates and options a lender has. But if foreclosure is the only thing left there are some options in order to avoid foreclosure. One option is refinancing, in other words you can reduce your interest rates and principal by extending the loan providing the home is still worth more than what you owe. Other options include: selling the home back to the bank and refinancing through another lender who has cheaper interest rates and offers a fixed rate versus a variable rate. Another last resort is to sell the house to a relative and owe the relative the money instead of the lender; this could eliminate interest and principal amounts from accruing. Another option is counseling. Debt counseling is feasible as it proves that you do have intentions of paying the loan you are just unable to currently pay them, if this is the case perhaps a loan modification might be the route to take.

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Foreclosure definition: When the financial institutions are unable to recover the money owed on the property, they are allowed to collect it through a series of legal process which is known as foreclosure. The lenders will try to sell the property by which they will regain the money. It is highly recommended for the borrowers to prevent foreclosure by taking immediate actions. Foreclosure Process There are 3 stages in a foreclosure process. They are pre-foreclosure, foreclosure and foreclosure auction. The first stage is the indication of the borrowers falling behind the payments. A borrower will know about his fiscal conditions better than any one. Hence, he should take corrective measures to avoid foreclosure. In this case, the lender will file a public Notice of Default with the Record’s Office in the country. The home owners should try their level best to avoid the foreclosure by paying the defaulted monthly payments. There are chances to save the home. If they fail to do so, the process will enter the second phase. The court will give rights to the lenders to carry forward the foreclosure process. A date for the public auction will be decided. The third stage is the actual auction which is also known as trustee sale. The highest bidder at the auction will take away the property by paying the money to the lenders.

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