Foreclosure is currently a massive problem that is predicted to get worse. Mortgage foreclosure filings nationwide have increased 93% over the last year. Estimates suggest there will be calls for 2 million more foreclosure filings in 2008.
Foreclosure can happen to anyone, in any financial income bracket. Foreclosure is the legal process lenders use to try to recover the loan amounts they are due on past due home loans. Ultimately it can make your home subject to seizure and the loss of your title of the property.
As a borrower you may have over stretched yourself in the amount you borrowed. Maybe you have been unlucky and had a loss of job, cuts in work hours or overtime. Maybe you have retired, suffered illness, injury, or the death of a family member. Even divorce and separation can cause a change in financial circumstances that suddenly makes foreclosure a real possibility.
The Biggest Problem Borrowers Face
The biggest problem most people in this situation have is actually facing up to the problem. Most people who are facing foreclosure are overwhelmed by the stress of the ordeal. Fear looks them in the eye as they dare to think about loosing their family home, homelessness and the effect on those around them. It's traumatic.
Foreclosure is also one of the worst credit marks to have. It has a negative effect on your credit and can hinder your opportunities to purchase another home or obtain credit for up to seven years.
Take Action Early
Taking action early is the key to surviving the foreclosure crisis. There are things that can be done to avoid foreclosure, but only if action is taken early on. It can be prevented but you must act quickly.
What Can Be Done?
Although foreclosure is a situation that borrowers dread, foreclosure is also expensive for lenders, mortgage insurers and investors. Mortgage lenders can lose between $40,000 and $50,000 in net value when a typical home loan is foreclosed.
Mortgage Modification Options
If you can make the payments on your loan, but you do not have enough money to bring your account up to date or you cannot afford the total amount of your current payment, your lender may be able to change one or more terms of your original loan to make the payments more affordable.
A Loan Workout Option
Another possible option is a loan workout. This is when you are able to negotiate with your lender an alternative payment plan that benefits both parties.
Mortgage companies want to avoid foreclosure where possible. Generally they are much more interested in the money they make from your interest, rather than the money they'll lose on your home foreclosure. This means that there may be options available but only if you act quickly and before the situation becomes irresolvable.
Research and Get Help
The key point is taking action. Don't deny you are in financial trouble. Research the options available and get professional help. Avoiding foreclosure means that when you get back on your feet, you won't be restricted by credit issues that restrict your future options. By taking action now, not only can you deal with your current difficulties, you will give yourself a better future.
Don't face foreclosure alone. Get immediate answers.
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