Avoiding Foreclosure.

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You don't have money enough to pay your mortgage? And your lender is already looking for ways to discuss this problem with you?

In this case don't panic and follow the advices below:

  • 1. Don't hope problems will be solved by themseves.
    The longer you continue to ignore your foreclosure problems, the lower chance you have to avoid the bankruptcy.
  • 2.Inform the lender about your difficulties.
    The lender provided a loan not to become the owner of real estate, thats why he can to help you to prevent foreclosure.
  • 3. Try to give answers to all lenders e-mails.
    Normally the first notifications you get inform you about the description of the possible ways to stop the foreclosure.
    So it may help you a lot. Secondly notifications may contain details concerning dates of legal actions. If you will not find time to read these notifications it will not be accepted as an excuse in the court.
  • 4. Read carefully about all the rights you have.
    First of all you have to know what can be the consequences of your problems with foreclosure. In order to reach the foreclosure prevention it would be very useful to get acquainted with mortgage laws in your state.
  • 5. Be informed about the leading ways to avoid bankruptcy.
    Internet is a great source of information about foreclosure problems.
  • 6. Contact the HUD specialists.
    The HUD of USA consults the clients all around the country.
    Professionals from HUD will provide you with infrormation concerning the specific aspects of law, will answer your question about financial side of problem, also you can get useful tips for having serious talk with your lender.
  • 7. Minimize the amount of money you spend.
    Try to figure out what expenditures are the biggest in your budget and then cut these spendings, so you will get additional source of money to cover your mortgage loan. Well, it doesnt mean you have to cut spendings for healthcare, but such spheares of spending money as transport expenditures, payments for cable TV, night clubs are of lower importance and can become a source of mortgage payments. Paying for foreclosure shoud be one of the first priority expenditures in your budget.
  • 8. Figure out what assets can be useful for you to stop foreclosure.
    Everybody has such assets as longterm insurance policy, shares, second veichle (car of bike) or other assets which can be sold in any moment to solve financial problems with foreclosure payments. Maybe somebody from our relatives can find a work to to prevent the foreclosure. It is not a way to increase your income to very high level, but it will show the lander your aspirations to save the house and to prevent foreclosure.
  • 9. No need to pay for tips to avoid foreclosure.
    If you are suggested to pay for help in avoiding foreclosure, it is better to refuse and cover current mortgage payment with this money.
    There will always be a number of organisations giving you a lot of promises and trying to profit from your situation. But informational services, lender or House and Urban Development professionals will proved all important information for free.
  • 10. Don't sign any documents without reading them carefully.
    Before signing the official document, look through them paying attention at each detail, because you may loose your house. These documents may say, that you are passing all your rights for this property to another person. It is better to trust counselors from HUD in order to stop foreclosure.

Number of foreclosure properties are growing daily. Its more than 100 millions properties in USA and near 4% or 4.8 million of them are facing foreclosure. Many homeowners are lucky to stop the foreclosure process, but, there were about 500,000 homes that were listed in foreclosure listings last year.

Post foreclosures (REO)

REO property or real estate owned property belongs to banks. How does it happen that banks own a real estate? Well, it is easy to understand: bank gives a loan, so mortgage appears, if client cant pay his dept and if there are no ways of preventing foreclosure, the home becomes the property of financial organization. It may seem that foreclosures can’t bring high profits as bank want to sell it offering the price which will at least cover the amount of the first loan. On the other hand, if you will be more attentive, you will see some ways to benefit greatly from buying a foreclosure house.

It may be the situation, when more then one loan is secured to the real estate; actually it happens quite often nowadays. In case second lender doesn’t make payments to the first lender and starts own foreclosure procedure, in this case the second lender is not part of foreclosure process any more. That is the main reason why plenty of second mortgages are valued around 20% less then the normal market price.

Bank doesn’t benefit from being an owner of a house; it needs money to flow constantly to get higher net profit. More over keeping a foreclosure as an asset may cause additional expenses. That is why bank wants to sell this burden as soon as possible, and it is likely to accept even not high price, just to cover the dept.

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