How to Stop Foreclosure at The Last Minute
When people are on the brink of foreclosure many bury their heads in the sand, hoping that the problem will go away if they ignore it. It certainly will not go away, but if they acted quickly, they could possible choose another option before it happens. This article will guide you regarding ,” how to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.”
The sooner you act when trouble strikes, the more options you have. Ignoring the problem until you are three or six months in debt, with no payments made at all during that time will leave you with almost no options but to accept whatever your creditor tells you he is going to do. You will be foreclosed, lose your home and have your credit rating plummet to the floor. How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
By acting quickly, you having more options and can remain in control of your destiny, at least up to a point. You can get debt counseling that could pull you from the depths and set your feet on the path – if not to financial freedom – at least to keeping your home. Most people wait too long before they attempt recovery, then find it impossible.
If you act quickly, your credit history will still be in good shape and so the creditor will be more likely to assist you. Call the phone number on your mortgage bill and ask to speak to the loss mitigation department. They are the ones who will have the authority to negotiate a better deal for you.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
The service provider – that is, the company who sends your mortgage bill and collects the money on behalf of the lender, will not have the authority to negotiate on the lender‟s behalf, so things are likely to get complicated if you ask them for help. If you can see trouble up ahead but your payments are so far on time and current, going to the wrong person can put you behind and cause your ok account to become a delinquent account.
Some brokers drag out the process for far too long and then don‟t give you anything – e.g. a new loan package – at the end of it. Don‟t deal with a broker, but go straight to the top as much as possible. Dealing with a financial institution that lends to individuals directly will ensure you get what you ask for when you need it, rather than too late, or not at all.
Acting quickly will assure the lender that you can be trusted to do all in your power to prevent foreclosure and pay your mortgage.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
When Can a Bank Foreclose On a Mortgage
Foreclosure is more common these days than ever before. This has come about by unscrupulous lenders offering „easy money‟ mortgages to those who want a home but really cannot afford the repayments. These people do not understand that once the time low interest rates is up, they will then have to pay a great deal more as their interest will soar. All they look at is what they have to pay back right at the present time.
They may not understand either, that there is more to pay in fees, taxes and other costs associated with the loan. Some people do not understand that an adjustable rate mortgage will have very high interest after the „teaser‟ period is up.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
They may think that there is as much chance of the interest rates falling as there is of them rising, but this rarely happens. If you want to be able to depend on your payments staying at the same amount for the life of the loan, a fixed rate is what you should opt for. The lenders simply want to have a great many mortgages that they then bundle up and sell to another company.
The second company is not personally associated with those who have taken out a mortgage. They just assume that these people can pay and if they cannot, wham! They hit them with a foreclosure notice. Foreclosure often happens because life happens. No life is perfect and ideal. Costs rise; accidents happen; cars get trashed; teeth need fixing; people get cancer or are injured.
The borrower may lose his job through no fault of his own. Sometimes simply having children unexpectedly can put a big dent in your budget. So these things happen and it takes more money than you expected. Some of the fault may lie with the lender, who pressed more money on you than you could really afford.
All he thought about was the interest he could make. You didn‟t think it through because all you could see was that enticing vision of your dream home – one that had four bedrooms and a swimming pool.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
Suddenly you don‟t have the money for the mortgage payment. If you don‟t do something about it quickly, the next thing you know there is a foreclosure notice in your mailbox. We all need to think about what we are taking on and make sure we can afford it for the thirty or so years that paying it off will take. It‟s much better to buy a cheap home and be able to keep it, than buy an expensive one and lose it in a year or two.
What is the Government Doing to Stop Foreclosures
There have been so many foreclosures that the government has created a few programs to help out those in need. Were you were one of those unfortunate people that accepted an adjustable rate mortgage (ARM) because the teaser rates were so low? Now you find yourself facing a really high rate of interest, and you know you will have trouble paying it.
Then you could qualify for one of these programs called Federal Housing Administration (FHA) Secure Refinance Program. A conventional lender will give you a fixed rate loan instead of your present ARM. This will ensure that the payments do not rise steeply at the end of the teaser period, as they do with an ARM.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
If you know that your payments will stay the same for the duration of the loan, you can budget accordingly. The FHA is not actually doing the refinancing, but they offer to insure the loan, which in many cases increases the likelihood of a lender offering refinance options. They don‟t have to worry about your ability to pay back the loan or your credit history. However, conditions still apply and one of those is that you have made the payments on time each month up until the date of the higher interest.
Late payments are allowed if they are due to the higher payment, but not if they are due to any other reason. Some of the other conditions are that your present loan is not already an FHA-ARM, and that the interest rates must be scheduled for resetting somewhere between June 2005 and December 2009. You must also have equity in the home of at least 3% and a history of steady employment.
And of course, you must have enough money to make the new repayments. To see if you qualify for this type of assistance you need to go to a lender approved by the FHA. A fixed rate mortgage may be just the thing for you. The website below will be able to help you find one close enough to where you live. So if you are wondering how you will ever afford those high payments that are getting closer by the day, act now to see if you qualify for assistance. Don‟t wait until you are delinquent on payments.
The sooner you seek help, the better off you will be. Prompt action will save your credit rating from plummeting and could even save you from the trauma of losing your home. 18. Can You Stop a Foreclosure There are several ways to stop a foreclosure, but the best way is to prevent it from happening in the first place.
To do this, you must act before your lender files that notice of default. If you call your lender as soon as you know that your payment will be late – or that it will remain unpaid, then you may be able to work out a solution together. Calling early will give you a lot more options. A lender may agree to forbearance, which is agreeing to wait for a specific time period before starting foreclosure proceedings.
This can give you some breathing space to come up with the payment. Or if you have already missed payments, he may allow you to repay them by spreading them out over several months and adding them to the monthly payment.
This is called a partial payment plan. Your lender may agree to refinance the loan so that the payments are more affordable. He may also agree to reduce the interest, extend the low interest period or change the loan to a fixed rate, rather than an adjustable rate. The lender may also agree to add the missed payments onto the loan balance, so that you don‟t actually have to pay extra each month to make them up.
This is all known as refinancing. If the Notice of Default has already been filed, you can stop foreclosure by selling your home. You may need to drop the price to get it sold quickly, though, so be sure that you still get enough to pay your other costs. In some cases your lender may agree to a short sale, but mostly they don‟t like this option, as it does not cover the full debt owed.
A deed in lieu is another option discussed elsewhere in this ebook. If foreclosure proceedings have been started, you can stop them if you file for Chapter 13 bankruptcy in the approved manner. This should always be a last resort. You still have to make the payments under the Chapter 13 bankruptcy plan, and failure to do so will restart the foreclosure proceedings.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
Another way to stop foreclosure before it starts is to keep on making payments regularly, even though you have missed one, or even two payments. While you may not be able to afford the extra payments that are now due, you will at least not be in arrears for the current payments. This will make your lender more amenable to helping you.
What to Do If the Bank Decides to Foreclose
If things have gone from bad to worse and your bank has decided to foreclose, don‟t give up hope of keeping your home; there may still be some way to save it. For foreclosure to become a fact of life, you need to have missed more than one payment on your mortgage. Most often you will be at least three payments behind. The first payment you missed, the bank will send you a late notice.
If you do nothing and miss the second payment, the bank will usually try to contact you. At this stage, they still want to help you resolve the situation. If no conclusion is reached, or if they cannot contact you then things go from bad to worse. They may allow another late payment, or they may invoke your acceleration clause instead.
An acceleration clause is when the whole of your mortgage comes due all at once. In other words the bank wants all their money right now. No waiting for thirty years to pay it off. You must pay the whole lot, including all the interest, costs and fees, immediately. This procedure is known as “calling the loan”.
It is also the point of no return. When the bank calls the loan, you need to get a good attorney – because you need legal help. You need an attorney who knows all about foreclosure law and can protect your rights. Strangely enough, it may still be possible to save your house.
But if you do nothing, then the bank will continue with the foreclosure and you will find an eviction notice in your mail within 6 to 12 months, depending on how aggressively the bank pursues their course of action. By the time you get that, your home will have been sold to the highest bidder. However, with the right attorney to advise and work with you, you can file a Chapter 13 bankruptcy claim and stop the foreclosure in its tracks.
This doesn‟t mean that you‟ll get away with not paying any more debt. It simply gives you time to breathe – and prepare other plans. If you are delinquent on your mortgage payments, then you could well have other creditors hounding you. Once you‟ve put in place the legal foreclosure prevention it also applies to other creditors.
All must stop trying to collect moneys owed. Secured debt must still be repaid in full, but unsecured will have to be satisfied with a ten cents in the dollar amount. The new payment plan that you get under a Chapter 13 will last for up to 5 years, giving you ample time to get back on your feet. 20. I Missed a Payment – Will the Bank Foreclose Normally, a bank will not start foreclosure proceedings after only one missed payment.
The trouble is, after you miss one payment, then every payment is deemed late because of that one still missing. That doesn‟t mean you should simply stop making any payments, though. Once you miss a payment, you need to figure out ways in which you can pay twice as much the next month. Meanwhile, you should certainly contact your bank to let them know you are still making the payments.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
You need to also work with them in figuring out a way to make up the missing payment. They may be happy for you to do a partial – pay part of the missing one each month until you have caught up. If you cannot afford to make two payments the next month, you‟ll keep on getting late notices and finally after the grace period, you‟ll end up with a notice of foreclosure.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
So, no, they won‟t foreclose immediately after you miss the first payment. They will send a late notice; a notice of default. But if the payments are not brought up to date, then eventually they will foreclose. It takes about three missed payments before this happens. It is never done without your knowledge.
Always open all the mail from your lending institution so you know what is going on. There are steps to take that can prevent foreclosure and save you home if you act promptly. Even your default notice will contain advice as to what you should do to prevent foreclosure. Read the letters carefully and decide if this is the best thing for you to do.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
If it is not, then get advice from a trained counselor. Having missed one payment you need to contact the bank and let them know whether or not you will be able to make up the missed payment next month and if not, what you can do about it.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
If you know you won‟t be able to keep up the payments, don‟t pretend that you can, or hide from the truth. There are many people out there who can help you out. Debt counseling help is free or low cost from several government sources; so don‟t neglect to seek help because you can‟t afford to pay for it. And never pay for it if there is a free option. HUD representatives are professionals who can advise you about your options for free.How to stop foreclosure at the last minute and when can a bank foreclose on a mortgage.
Read Also :
- Benefits of refinancing Your Mortgage
- How to Refinance Your Mortgage
- Why Should You Refinance Your Home Mortgage?
- Understand Mortgage Refinancing & Home Equity Refinancing
- Selecting a Mortgage Refinancing Company : Mortgage refinancing tips
- Home with Bad Credit , Mortgage Refinancing after bankruptcy & scams
- How Much Mortgage You Can Afford : Motgage affordability
- Tips for first time home buyers : Home Mortgage Loan
- Shopping For a Mortgage : Find Financing Online & Compare interest rates
- Deed in lieu : home over to the lender ,filing for bankruptcy and prevent foreclosure