You can prevent foreclosure if you communicate properly with your lender, and review and apply one or more of the stop foreclosure methods we discuss below. First of all, you have to be confident that you can avoid foreclosure. Keep calm and set yourself to work.
The high number in home foreclosures in our time is to a certain extent due to the unfortunate lending practices that many banks follow. Many people who should not have been given a home loan or a mortgage were given one. These people are most at risk of losing their home.
Now the problem for many people is that this foreclosure trend makes them think that if they receive any notices of possible foreclosure procedures to be brought against them, they are done for; they have no hope of saving their home. The good news is that this is not true at all. There are several ways you can apply to prevent foreclosure.
Lenders are interested in avoiding foreclosure too
You can indeed prevent foreclosure because lenders do want you to save your home by getting current on your mortgage payments.
Lenders try to avoid foreclosures almost as much as you would. Foreclosures mean a lender has lost money, and all that foreclosures are, besides being justice for you not living up to your end of a contract, are a stop-loss measure for the banks.
Banks do not want your house and that is why preventing foreclosure is realistic; they want you to keep paying back at interest. It is on those interest payments that they make money, not on auctioning off your house. In addition to lost interest payment revenues, banks lose an average of $40,000 in foreclosure process costs for just one house.
So, what this means for you is, you can prevent foreclosure if you have any ability at all to pay back your loan and get current on your payments. Most states have a grace period law about loan and mortgage payments, which states that you are allowed to be up to 30 days behind on one payment before any legal action can be taken against you.
Most lenders, since they really do not want your home, extend this to three months, which is another help to prevent foreclosure. However, mortgage loan interest accrues by the day; so, every day that you get farther behind in payments means you owe even more money than you otherwise would. Nevertheless, this does not mean you will be foreclosed upon.
Prevent foreclosure by communicating with your lender without delay
This is one of the first foreclosures solutions any homeowner in trouble should apply to prevent foreclosure —the sooner the better. You will see that all reliable foreclosure help organizations, whether from the government or private, recommend opening a line of communication with you lender society as a first step to avoid foreclosure.
For some homeowners talking to the lender seems so obvious that they do not even think about it, others are scared to phone or meet their lenders. Try not to be.
In the next prevent foreclosure section we give you some tips to communicate with your lender to prevent foreclosure, and highlight other stop foreclosure solutions for you.