The consequences of foreclosure can be far reaching. While foreclosure laws vary from state to state, general strategies exist that apply in most situations. It should be kept in mind that stopping foreclosure does not always imply keeping the house. Stopping a foreclosure may only benefit the home owner by being able to keep a foreclosure off of their financial record. Keeping something like this out of the financial history can be beneficial as the home owner tries to get back on their feet. They will be more likely to be approved for a new home loan or allowed a faster approval for a new apartment.
One way to stop a foreclosure is to pay off the defaulted loan amount during the pre-foreclosure grace period. This grace period is the last chance the home owner has to stop the foreclosure process before being forced to leave the residence. Each state has their own rules as to how long the grace period must be. The law requires that a grace period be given before an attempt to take the house back is made by the lender. This allows the home owner a chance to rectify the situation before the lender takes more drastic actions.
The homeowner can avoid a foreclosure in their financial history if they can sell their property to another person and make enough money from the sale to cover the balance of the mortgage. Since the new buyer will pay off the original lender, the former home owner’s record will not reflect that they lost their home because of foreclosure, it will just show up as a normal sale in their past. A person can buy the property from the owner or from the lender in a public auction after the grace period. If the home owner can find a buyer willing to pay more than the remaining amount of the loan, the home owner may even be able to walk away with some cash in hand for the deal.
If the lender is willing to accept less money than what is left of the loan, they may approve the owner to complete a short sale. If the home owner can find a buyer for the property for an amount lower than what remains on the loan, the lender will have the option of approving the sale and forgiving the difference, approving the short sale and demanding the difference of the loan, or refusing to approve the sale and allowing the house to fall into full foreclosure status, public auction and all.
It may seem like the above listed information is “not good enough”, but quite frankly, few options exist for keeping a home after a foreclosure has already been initiated. This does not mean that a person has to have the rug torn completely out from under them, it just means that a person shouldn’t expect miracles. While it may take some time and a willingness to adapt to the new change, recovering from a foreclosure is possible. Recovery is also possible if a person avoids a foreclosure but is still required to leave the residence.
Fighting a foreclosure alone can be a stressful event in a person’s life. Hiring a lawyer specially trained to deal with banks and lenders may stall the process considerably in favor of the home owner. Even a few extra days to fight the process can help the home owner prepare for life after losing their home. The home owner should never forget that they have rights during the foreclosure process as well, and a lawyer can make sure that those rights remain in tact.