Foreclosure is a process which happens after a person has neglected to pay their mortgage payment for a number of months. After such time, a lender typically begins the process of reclaiming the property in an effort to compensate themselves for some of their losses.
Not only is the process of foreclosure a disappointing thing for a homeowner to need to go through, it is an expensive process for the lender as well. There are a number of legal elements to the process which cost money in lawyer fees for the lender. A foreclosed home usually also does not sell for nearly what it was worth before the foreclosure process. This is mainly due to the home’s title being a “Quit-Claim” Deed, instead of a Warranty Deed. A Quit-Claim Deed does not offer the security that a Warranty Deed does, so there is a chance that previous owners of the property can claim that they still hold legal ownership of the property.
The process of trying to stop foreclosure can be difficult, but it is not impossible. People often try to use the legal system in this way. Lawyers can sometimes find legal loopholes in foreclosure documents to give their clients more time to make mortgage payments. With the economy the way it is, there are mortgage lenders finding it hard to convince a judge to be sympathetic to their cause. Many courts rule in favor of the homeowner and encourage mortgage lenders to find a way to form alternative financing for homeowners who are having difficulty making monthly payments.
You’ve probably seen ads for purchasing foreclosed homes online or on television. These homes may sound like great deals, but you are essentially purchasing a home that someone else could not pay for when you are buying such a property. Since the home was not given up willingly by the homeowner, but repossessed by a financial institution who originally loaned money for the property, there are always possibilities of title issues with the property’s deed. Many potential home buyers shy away from buying foreclosed properties because of this aspect of them. Others find that they can buy these homes, fix them up, and resell them for a huge profit. There is always an element of risk involved with purchasing such homes, however. The former owner of the home could take the buyer of the home to court in order to attempt to get ownership of the home back. Any repairs done to the home would usually be forfeited if the old owner is allowed to take the home back. This can be a huge financial loss.
People who are trying to stop foreclosure can also contact the lender and explain that they are having financial difficulties. Many lending organizations are more willing to work out payment plans with a homeowner than try to go through the foreclosure process. Since foreclosing on a property is so expensive for mortgage lenders, many of them try to avoid the process as much as possible. The time and effort spent on trying to foreclose on a home could be better spent working out payment plans for homeowners who may be back on track with their payments within a few months. Filing Bankruptcy to Stop Foreclosure