Foreclosure prevention.

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You don't have money enough to pay your mortgage? And you have already found a letter from lender in your mail box?

If you have such problems, the following tips for avoiding foreclosure will be usefull for you:

  • 1. Try to solve your problems with foreclosure.
    If you do nothing to solve problems with mortgage payments, you are likely to loose your foreclosed homes after all.
  • 2.Try to discuss the problem with your lender.
    Actually lender doesn't want to get your foreclosed home, thats why he can to help you to stop foreclosure.
  • 3. Don't avoid contact with lender.
    As a rule the first notifications you get inform you about the description of the suitable%best options to prevent foreclosure.
    This information can be very important and useful. As well notifications may contain details concerning terms of legal actions. If you will not be informed about these detailes it will not be accepted as an excuse in the court.
  • 4. Get to know your legal rights and obligations.
    It is important to know what lender can undertake in case you can't avoid the foreclosure payments. In order to stop foreclosure it would be very useful to contact the State Government Housing Office.
  • 5. Learn about the main options to prevent foreclosure.
    Internet is a great source of information about foreclosure problems.
  • 6. Use help provided by HUD professionals.
    The Department of Housing and Urban Development provides consulting for all clients in the United States.
    HUD counselors will provide you with infrormation concerning dealing with law, will answer your question about financial side of problem, more over you can get useful tips for having serious talk with your lender.
  • 7. Set priorities in spending money.
    Try to figure out what expenditures are the biggest in your budget and then minimise these spendings, so you will find additional financial means to pay your loan. In reality there are some special priorities, as health, which we can't sacrifice, but such spheares of spending money as paying for TV, computer games, various entertaiments are of lower priority and can become a source of mortgage payments. House payments shoud be one of the first priority expenditures in family budget.
  • 8. Find additional money sources for avoiding foreclosure.
    Almost everyone has such assets as some golden or silver rings, maybe second car or insurance policy or other assets which can be sold in any moment to solve financial problems with mortgage payments. Maybe somebody from our relatives can get a job to to avoid foreclosure. It is not a way to increase your income to very high level, but it will show the lander your desire to keep the house and to avoid bankruptcy.
  • 9. Don't pay money for free advices.
    If some company offers you help for a certain price, it is better to refuse and pay for foreclosure instead of spending money for it.
    There will always be a number of organisations giving you a lot of promises and trying to profit from your situation. But lender himself, counselers from HUD, another special services will proved all important information not charging money from you.
  • 10. Don't sign any documents without reading them carefully.
    If you are suggested to sign any official paper, never do it blind, look through it attentively, because you may loose your property. These documents may say, that you are passing all your rights for this property to another person. It is better to trust HUD professionals in order to avoid foreclosure.

Number of foreclosure homes are growing daily. Its more than 100 millions properties in US and near 4% or 4.8 million of them are facing foreclosure. Some of homeowners are able to stop foreclosure, however, there were about 500,000 homes of them which are listed in foreclosure for sale 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 foreclosure avoiding, the house 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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