What a homeowner needs to know about foreclosure
Learn more about why it’s important for homeowners to understand what foreclosure is and how it can affect them!
- Difficult financial situations don’t automatically lead to foreclosure. Whether you have mounting medical bills, lost your job, or have other financial difficulties, it may be possible to avoid foreclosure. Take proactive steps to speak with your lender about what you can do if you anticipate missing mortgage payments in the future.
- Read all of your loan documents. When facing foreclosure, make sure to reread all loan documents; there may be crucial information in the documents that will impact the foreclosure process on your home. Consult an attorney specializing in real estate or foreclosures if necessary.
- Foreclosure is a process. Foreclosure is not a thing but is a series of events. Lenders focus on the property rather than on the homeowners during the foreclosure process.
- The terms and length vary by state. The foreclosure process has four phases; the terms of foreclosure, as well as the legal rights of the homeowner, vary by state.
- The lender is not eager to take your home away. Lenders are in the financial business – not the business of financial management. Because of this, lenders are often willing to work with homeowners in order to do whatever possible to keep them in their home.
- You can still sell your house. Even if foreclosure is looming on the horizon, you can still sell your house. Keeping the home in good condition and pricing it well can help it sell quickly, even in competitive markets.
- Short sales may be better. In a market with lots of inventory, the lender may be willing to opt for a short sale; while this may result in the house selling for less than the mortgage, it prevents the lender from being stuck trying to sell the property.
- Foreclosure has serious long-term consequences. Foreclosure is more than just losing your home; it has serious, long-term financial, legal, and even tax consequences. Because of this, it is important to exhaust all other possible options before resigning yourself to foreclosure.