There have been a record number of foreclosures over the last few years. The main reasons for them have been a combination of the bursting of the housing market bubble and the loss of jobs in the poor economy. The result is that many homeowners feel themselves squeezed from both ends-through no fault of their own, hundreds of thousands of people find themselves living in houses that are worth less than they owe, and they've either lost their jobs or been forced to take pay cuts, with the result that they fall behind on their house payments.
When homeowners fall far enough behind, the mortgage company can start a foreclosure action. Foreclosures are legal actions where the financial institution holding the mortgage takes possession of the property or sells it when the loan is in default. There are two basic kinds of foreclosures: judicial and non-judicial foreclosure. A judicial foreclosure is a legal action where the mortgage company obtains a judgment against the homeowner, and eventually gets permission to take possession of the house and sell it. A non-judicial foreclosure involves an agreement between the mortgage company and the homeowner where the mortgage company notifies the homeowner of their intention to sell the property unless suitable payment arrangements are made. In either case, the title to the property is transferred to the mortgage company.
There are four methods of foreclosure.
1. Strict foreclosure, where the financial institution automatically takes ownership of the property when the borrower defaults. These are less common than the other methods described.
2. Judicial foreclosure, where the court decides who gets title to the property and decides what happens to it, such as selling it or allowing the bank to take possession. This is the most common type of foreclosure method.
3. Foreclosure by power of sale, which can occur if the mortgage document allows it.
4. Foreclosure through deed in lieu, where the homeowner conveys their title to the property back to the financial institution and "walks away" from the property.
There are several ways to prevent foreclosure. The federal government and most financial institutions have loss mitigation programs that help homeowners who are in default. They find ways to avoid foreclosure based on the individual circumstances of the borrower. These loss mitigators will negotiate with the lender to get the best solution available to prevent or stop a foreclosure. Another way to prevent foreclosure involves submitted a request for a payment plan to the lender. For homeowners holding FHA Type I and Type II loans, special forbearances may be available if the loan is 90 to 365 days past due or if the borrower fell behind due to unemployment. For people with longer term hardships, some borrowers can qualify for loan modification programs where the lender adjusts the terms of the loan to make it more affordable. For homeowners who qualify, the Veterans Administration (VA) can buy the loan, and refinance the loan, adding the delinquent portion onto the principle balance. Finally, homeowners with FHA loans behind 120 to 365 days behind can sometimes qualify for partial claims, where the past due payments are put into a second mortgage on the property, and repaid over as much as 12 months.
As you can see, although the picture can sometimes look bleak, even if the lender has already started a foreclosure action, homeowners can take advantage of several methods to stop the action and save their homes. The key is to find a qualified company that can help in these situations.
If you're looking for help, click here: [http://www.aldebt.americanbusinessdirect.com]
A. Langan
When homeowners fall far enough behind, the mortgage company can start a foreclosure action. Foreclosures are legal actions where the financial institution holding the mortgage takes possession of the property or sells it when the loan is in default. There are two basic kinds of foreclosures: judicial and non-judicial foreclosure. A judicial foreclosure is a legal action where the mortgage company obtains a judgment against the homeowner, and eventually gets permission to take possession of the house and sell it. A non-judicial foreclosure involves an agreement between the mortgage company and the homeowner where the mortgage company notifies the homeowner of their intention to sell the property unless suitable payment arrangements are made. In either case, the title to the property is transferred to the mortgage company.
There are four methods of foreclosure.
1. Strict foreclosure, where the financial institution automatically takes ownership of the property when the borrower defaults. These are less common than the other methods described.
2. Judicial foreclosure, where the court decides who gets title to the property and decides what happens to it, such as selling it or allowing the bank to take possession. This is the most common type of foreclosure method.
3. Foreclosure by power of sale, which can occur if the mortgage document allows it.
4. Foreclosure through deed in lieu, where the homeowner conveys their title to the property back to the financial institution and "walks away" from the property.
There are several ways to prevent foreclosure. The federal government and most financial institutions have loss mitigation programs that help homeowners who are in default. They find ways to avoid foreclosure based on the individual circumstances of the borrower. These loss mitigators will negotiate with the lender to get the best solution available to prevent or stop a foreclosure. Another way to prevent foreclosure involves submitted a request for a payment plan to the lender. For homeowners holding FHA Type I and Type II loans, special forbearances may be available if the loan is 90 to 365 days past due or if the borrower fell behind due to unemployment. For people with longer term hardships, some borrowers can qualify for loan modification programs where the lender adjusts the terms of the loan to make it more affordable. For homeowners who qualify, the Veterans Administration (VA) can buy the loan, and refinance the loan, adding the delinquent portion onto the principle balance. Finally, homeowners with FHA loans behind 120 to 365 days behind can sometimes qualify for partial claims, where the past due payments are put into a second mortgage on the property, and repaid over as much as 12 months.
As you can see, although the picture can sometimes look bleak, even if the lender has already started a foreclosure action, homeowners can take advantage of several methods to stop the action and save their homes. The key is to find a qualified company that can help in these situations.
If you're looking for help, click here: [http://www.aldebt.americanbusinessdirect.com]
A. Langan
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