A foreclosure is a legal proceeding which happens when a house owner is not capable of meeting up with the principle and/or the interest amounts on their loan. The banks foreclose on the house by seizing it and eventually selling it.
How to Avoid Foreclosure
Do not ignore the problem because it will not go away on its own: This is the type of difficulty that only worsens with time. The more debt that accumulates, the harder it is for you to reinstate your loan and become current on your payments.
Contact your lender as soon as you realize you have a problem You may think your lender does not care but newsflash, they do. They want to know why you are having difficulty making your payments and believe it or not, they do not want to take away your home. They have the resources available to educate you about how to avoid foreclosure. They are the professionals they are the ones you should be turning to. Forget the embarrassment and forget your ego. Make the call as soon as possible because the earlier you call the more choices you will have. Make the call, deal with the problem head on and with your lenders assist, you will be able to get a handle on the circumstances.
Do not avoid mail sent from your lender. Open it and respond to it quickly usually, the first letter you receive will deal with your late payment status. It will include information and advice on how to avoid foreclosure. Shortly thereafter, you will receive information regarding pending legal action. First off, do not ignore these letters. If you do not respond to them, they will initiate legal action. By shutting them out, you are only restricting yourself from any future resolutions. You will also be making it more complicated to become current on your loan. For your own welfare, do not ignore your lender!
Know the rights granted by the contract you signed The point of this is for you to familiarize yourself with the ins and outs of your situation. Read the loan documents and read all of the information regarding what actions your lender may take if you miss payments. Also, familiarize yourself with foreclosure laws in your state. Inform yourself!