The level of homes in foreclosure has skyrocketed to more than 13 million properties across the United States. While no homeowner wants to have their property repossessed by the bank, many have no other option.
The enormous amount of houses in foreclosure has caused a domino-effect. When banks foreclose on houses, homeowners lose their house and all funds contributed toward the purchase. Mortgage default causes lenders to lose profits through expenses of the foreclosure process and inability to collect past due payments.
Residents experience a loss in real estate value when communities suffer from several foreclosures. Entire communities lose income that was once obtained from property taxes and used to enhance infrastructure and schools, and supply emergency services.
When house values decline property owners are often left owing more on their home than it is worth. Mortgagors that have underwater mortgages find it challenging to qualify for mortgage modifications or mortgage refinance. Those that don’t qualify for reduced payments are oftentimes forced into bankruptcy or run the risk of losing their property to foreclosure.
There are quite a few foreclosure prevention methods that are offered, but homeowners need to be relentless in negotiating with their bank. Once property owners become delinquent with mortgage payments their account is turned over to a bank loss mitigator.
Banks can begin foreclosure when loan installments are 31 days late. The majority of lenders opt to work with homeowners and develop a workable plan that lets them keep their home.
If homeowners are able to pay off late amounts within a couple of months, banks usually accept the payments and no further action is taken. If homeowners don’t have the ability to pay the past due amount in full, banks can supply other options. A couple of the more common include: deferred payments, mortgage loan forbearance, loan modification, and mortgage refinancing.
People with houses in foreclosure may discover it helpful to obtain HUD housing counseling.Counselors are available to talk about available programs and help homeowners fill out application papers. Available programs and a list of nationwide housing counselors is published at the HUD website.