A pre foreclosure could be seen as an opportunity to avoid foreclosure. The foreclosure procedures go through different stages. Pre foreclosures also allow the stressed homeowner to make the late loan repayments, bring the account current and thus keep the real estate.
A pre foreclosure is a stage previous to a foreclosure that can last from three to six months. During this time, homeowners can still avoid foreclosure by simply paying the defaulted mortgage payments. If you do that, your home will not go into full foreclosure.
Property in pre foreclosure
When a property is in pre foreclosure the bank or other lending company has to send word to the homeowner that his/her house is in pre forclosure. At this stage of a pre foreclosure home, most of the times the lenders are willing to collaborate with the homeowner to design a plan that is acceptable for the lending society and makes repayments affordable for the homeowner.
Keep in mind that generally the lending institution is not particularly interested in a foreclosure process that costs them money. Besides, often foreclosure procedures fail to produce the entire sum of money that is owed to them. They would rather work with homeowners in financial difficulties to find a solution for the missing mortgage repayments.
In times of general economic troubles, it is not easy for the lenders to sell foreclosed homes for the right price. Thus, they might end up losing money on the foreclosure and the poor sale of the foreclosed home.
You can count on it most of the times. During the pre foreclosure, the banking or lending institutions will tr everything in their power to come up with a new payment schedule to prevent foreclosure, perhaps a mortgage refinance plan or extending the payment period over more years to make the bills more affordable for the homeowner. You should not delay collaborating with your lender. The sooner you get down to it the better.
How foreclosure procedures start
States have regulations that establish the months that a property is in pre foreclosure. The best thing you can do is to ask for advice at your local real estate agency, specialized lawyer or lending society. You want to find out the amount of time you have available to settle things with the lenders before they go on with the actual foreclosure process.
During pre foreclosure the lending company does not have the legal right to go on with foreclosure procedures. Hence, it is pivotal that you are aware of the exact time at your disposal.
During the pre foreclosure months, the lending society cannot take legal actions to expel homeowners that have failed to meet their obligations from the pre foreclosure property. If the pre foreclosure period ends without a new agreement between the homeowner and the lender that corrects the late payments, the bank or lending society have now the right to start foreclosure procedures and repossess the foreclosed home.
If the lending society and the homeowner develop a more affordable repayment plan together, there is a foreclosure stop and from then on the new payment schedule, mortgage refinance or mortgage expansion prevails.
In fact, a pre foreclosure process can occur more than once. However, the second time the lending companies will be more reluctant to cooperate with homeowners that are repeatedly late on payments to find a solution that corrects the non-payment situation.
So be sure to grab your opportunity stop foreclosure in the first pre foreclosure period. In a second pre foreclosure collaboration with your lender will become more difficult.