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How to Handle Foreclosure


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Foreclosure tends to affect a business negatively and it makes such a business unappealing to future lenders. For such lenders, repossessing a delinquent property is an arduous and costly task and the average foreclosure may cost a lender as much as $58,000 only in fees. Banks and mortgage companies are in business so they can make money through the loans they offer and not real estate.

A number of ways exist through which foreclosure can be delayed and it all depends on if the individual is smart enough to try any. But what is the first step towards keeping your home when you are faced with difficult financial circumstances which make it difficult to make monthly payments on your home?

The first step is to admit that you are in trouble and you require help. The next step is to contact your lender and be honest about it. A lot of people can usually avoid losing their homes if they simply notify the lender of what is happening. Of course, you'll still have to pay back the loan but you can easily renegotiate on the terms of the loan or get certain finance fees waived in order to help you until you get to a better financial state. If you are proactive about your situation, you can free yourself from a lot of stress and avoid both headaches and heartaches. If you've fallen behind by more than a month, your options become less easy to negotiate so you should consider contacting your lender early enough.

Step #1: Negotiate With Your Lender.

Make sure that you have all your necessary financial information available before you before you call on your lender. You should also be prepared for the fact that you might have to talk to a lot of different people before you find a solution which will satisfy both you and your lenders. Preventing foreclosure can be difficult and frustrating but it is best to remain focused, polite and calm at all times. You should remember that they aren't obligated to work with you in the first place.

When you're done explaining the situation, make sure you inform them of what you are able to pay at the moment and when you think you'll be able to resume regular payments. Make sure that you calculate an amount which you can handle rather comfortably, as soon as you have agreed to a new payment, you will be required to make it or you will risk losing your home sooner than you expected.

Step #2: Look at ALL The Options.

As soon as you have started seeking out options, you will be surprised at the wealth of options which are available to you. While they may not all be what you really desire, but you would be best off considering everything. Retaining ownership of your home may be the best thing for you but making the smart decision should hold weight over this fact. You're always better off admitting when you are overwhelmed and sell your home, rather than losing it to foreclosure.

However, selling your home isn't the sole option and a few more of these options exist.


You can defer all or part of your said monthly payment for a certain amount of time or due to any unexpected emergencies such as a sudden job loss, death or injury, you should make sure that you keep the fact in mind that such options are not available as soon as you have fallen behind in your payments. You will also have to pay back the missing payments as soon as you have sorted out your finances. . .


Offered when a delinquent borrower is expecting (and can prove) that they have a significant amount of income coming in from a pay raise; bonus; tax return; property sale; retirement account buyout; or even an inheritance and agrees to sue it to pay back the delinquent payments in full.

Repayment Plan.

For those who fall behind in their payments on a short-term basis and then can begin making full payments, plus a little extra each month, repayment may be the perfect solution. This option combines a portion of the past due amount with the current payment until the entire delinquent balance is paid in full.

Loan Modification.

Loan modifications may be used to extend the life of a loan in order to keep making the same payments while a borrower pays back past due amounts.


Refinancing exist mortgages into a fixed-rate loan might be a very good option for some people. It may however be rather difficult to do as soon as your credit score has been affected by late payments or payments which you have completely failed to make.

Guy Starbuck is a health oriented homeowner who writes for , and .


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