Buying our first home is the biggest dream for the majority of individuals. This is a difficult process in the current times, considering the high costs and expenses involved in this as well as the legalities of the process. Although when you get the keys to your place you instantly feel like the work is over and concerns are over, being able to maintain the mortgage payments can be an issue. Life changes and so does our financial situation, most times without warning.
No matter what your financial situation is and what is causing your monetary issues, once you stop making the payments, you risk facing foreclosure. Foreclosure is the legal process in which a lender takes possession of the property and sells it to use it as collateral for the payments. In this article, we will discuss the immediate steps you can take when your property gets foreclosed.
Understand What is Happening and Know Your Rights
A foreclosure is an overwhelming event and it can bring out many negative emotions for you and your loved ones. Evidently, the possibility of losing your home is distressing and it involves planning for an unknown future. People in this situation often focus on the emotional aspects of the situation and forget to think carefully about what is going on. Make sure that you understand the process clearly so that you know your rights when it comes to foreclosure. Start by reading your mortgage documents and learn about the foreclosure laws so that you understand what is in your lender’s power in case you fail to make payments.
“The laws regarding foreclosure varies from country-to-country but it’s worth noting that lenders (who are the first to initiate the process) are often reluctant to initiate the process. Repossession (as it’s called here in the UK) is often a last resort as mortgage companies realise the real costs of undertaking the process are more expensive than working with the borrower to come to a solution,” comments Ruban Selvanayagam of the Property Solvers Auction House.
Do Not Ignore The Problem
One of the biggest mistakes for many people is to ignore the problems when they are first faced with it. It is in human nature to avoid anything that does not make us feel positive. You need to act as soon as you receive a notice about foreclosure or a warning, to avoid bigger problems. This will also enable you to start taking action against the foreclosure and avoid your property being taken away from you.
Seek Legal Guidance
As soon as you receive a warning or a foreclosure notice, it is pivotal to seek guidance from a legal expert. You may think this is not necessary as once you receive a notice, there is nothing you can do for your property.
However, this is not true. Whether you are at the beginning of the process or already fighting a foreclosure case, legal experts can support you and fight for your case. You must consult with an attorney in your local area; for example, if you live in Florida, then consulting with Florida foreclosure defence lawyers is a smart move because different areas will have different guidelines and laws when it comes to property. Doing this will increase your chances of resolving this issue so you do not lose your home.
Call Your Lender
As soon as you are aware of the problem, contact your lender. More often than not, lenders do not want to take your home and they will happily discuss your options with you. As mentioned above, you must not ignore the issue at hand and take action as soon as you can so that you prevent bigger problems. Lenders can provide you with alternatives to help you meet your payments and avoid repossession of your home.
Consider Filing for Bankruptcy
One of the most common (and effective!) ways to prevent foreclosure is to file for bankruptcy. When you do this, the law states an ‘automatic stay’, which stops creditors from starting any efforts to collect debts against you or your home until the matter is resolved. Although this option will release some of the stress and worries about losing your home, it will also have a long-lasting impact on your credit and financial health. You must carefully think about this and consult with a legal expert before going with this option. An attorney will be able to advise whether this is the right option for you.
Review Your Finances
Foreclosure is usually the result of failure to maintain the payments of the home as agreed. In the majority of cases, this is due to financial difficulties or a failure to budget appropriately. Even if you have successfully filed for bankruptcy, you will still need the money to make the payments that have been missed and any future ones. Make sure to review your finances carefully and put your mortgage at the top of the list of priorities.
Facing a potential foreclosure can be devastating, but you must not let this affect you to the point you do nothing about the situation. Make sure to follow the immediate steps discussed above that you can take when your property gets foreclosed, to prevent this from happening.