If you face Foreclosure? - airline tickets header graphic

If you face Foreclosure? - What Next

Why do people get into Foreclosure and risk losing their homes? Often it comes down to one simple thing - Financial Hardship. Financial hardship can come because of a number of reasons - job loss, injury, illness, death, divorce or the many other things life can throw at us. When people entered into a mortgage agreement they do so in good faith with the view paying off the loan over time. However this contract is a very long term commitment - 20, 25 or 30 years or more. To believe you can go through 30 years without some financial problem arising is naive.

Often people overcome these financial problems if they are only temporary. If they become mid to long term however Foreclosure can loom. Foreclosure is when a bank or lending organization due to unpaid repayments undertakes its legal power to regain its money through the sale of the underlying asset - in the case of a foreclosure a house, land or other form of real estate property. Even in a good economic environment foreclosures occur because families face financial hardships - injuries and illness can happen at the best of times. The only advantage at these times is the property can often be sold before foreclosure allowing the owner to regain their equity or realize capital gains. This of course still means they lose home ownership but it is better than losing everything. In a soft market the situation is much worse. It may prove impossible for the house to be sold, or it may be sold for much less the owner brought it for.

During economic downturns foreclosures go up. They are worsen in the fact that the owner faces losing all their equity and may never be in a position to buy a home again. In any foreclosure the bank is not your friend. The bank only has ONE interest - getting THEIR money back - or at least at much of its as possible - as FAST as possible. This means they will sell your house in a FIRE sale - getting whatever they can for it. It this means they lose money so be it, they can make more by quickly getting that money re-loaned and earning interest.

Once a bank starts foreclosure action they will have already incurred legal expenses. Because of this they are unlikely to want to speak to the owner. A bank normally wait a long time before beginning foreclosure action - 3, 6 even 9 months, but once they do it can be almost an unstoppable force unless outside help is sought.

If you face losing your home make sure you seek help. Putting your head in the sand will not help - seeking assistance may.


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