TOP 3 MYTHS ABOUT HOME FORECLOSURE
There
are many myths about home foreclosures. Those myths are from the lack of
understanding the process of foreclosure, foreclosure laws. Those myths cause
fears, emotion. They also cause homeowners not to take action to stop home
foreclosures. Here, I only list top three of them that hurt home owner
most.
Myth 1: Lender wants to take your home back.
Almost
every borrower will receive a letter or more than letters from the lender or
lender’s representative or lawyer threatening to homeowner not to stay if a
borrower fails to pay the mortgage payments consecutively for more than three
months. Those letters are mostly written by lenders’ attorneys. The language or
words used in those letters are usually rusty and threaten. But they are
basically saying the same thing. That is, if you don’t pay, you cannot stay. This
sounds like that lender wants to take back your home. Most borrowers thought
that was what lenders really want. This is far away from the truth.
Truth: Ninety percent
of the instructional lenders almost never want your home. What they really want
is for you to pay their money back with interest. In fact, instructional
lenders usually hate going through the foreclosure process. Actually, there are
several reasons why lenders hate to take your home back.1. Lenders are not in
the business of real estate. Their business is to loan you money and make money
on the interest.2. The foreclosure process cost a lot of money. Lenders have to
pay legal fee, real estate agent fee, property taxes, property management fee,
and repair costs, and many other costs.3. A lot of the time, the properties
taken back by lenders were damaged, or trashed and either by borrowers or
other people. Those cost lenders a lot of money to repair. 4. Lenders also loss
money for not getting interest payments.5. Lenders also have to pay the
interest payments to wholesale lenders whom they borrowed money from. 6. Each
property taken back by lender will increase the number of bad debts in their
portfolio, which will decrease their ability to borrow more money.
Lenders make money by borrowing money from wholesale lenders and
then loaning the money to home buyers. That is why lenders hate to
do the foreclosure and hate to take your home back. Lenders actually will bend
over backwards to work with homeowners in avoiding a foreclosure. Often the
lender’s flexibility still doesn’t go far enough in stopping the home
foreclosure. So, never confuse that with the lender “wanting” your house.
What they really want by sending those rusty letters to you is to get you
to pay for the mortgage payments. I will tell you the right way on how to deal
with lenders and how to work with them in you advantages later.
Myth 2: I have no job and no money and there is no way for me
to stop the home foreclosure.
Truth: Even though
you have no money and no job, there are still several ways to stop foreclosure.
You can turn the property back to the lender with “deed in lieu”; or you can
ask lender to accept a discount sell the house to a buyer. In both ways, you
will not have a foreclosure records in your credit history. Lenders will accept
your request for deed in lieu or a short sale if you can approve that you don’t
have any capacity to pay them. You can even ask them to forgive the
“deficiency” or not to suit late you for the money you owned.You can also work
with a investor to lower down if you have a lot of equity in the home. If
you are an elderly, check with the lender to see if a reverse mortgage is
possible.
Myth 3: If I run away or hide, I have nothing to loss and
lender cannot do anything to me. There is no consequence to me.
Truth: No matter
where you hide, lender still can go after you for the money you owe. Lenders
can file deficiency judgment for the money you owed. Even though, lenders don’t
suit you for the deficiency, there are still several consequences to you. Foreclosure
in your credit records will cost you a lot of money for the next coming ten
years. Poor is expensive and poor credit score is also expensive. Poor credit
score will not only make you to pay higher interest in your credit payments,
but also make you harder to find a new job.
If
you are facing foreclosure, you should take actions to stop the
foreclosure no matter what situations you are facing. Please don’t give
it up lightly.
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more information on how to stop foreclosure, please fill out this form and
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sale date is more than two weeks away, fill this up right away to review your
situation.