| Consequences of going into foreclosure include | | | | or check the tax laws for the exemptions and |
| losing the home, not seeing any profits at all from | | | | ways around paying this, as there are protections |
| the county sheriff sale, having a scarred credit | | | | for homeowners in foreclosure, of course. |
| report with a full foreclosure showing for years, | | | | Escaping the Foreclosure Process |
| and having to explain to landlords afterwards that | | | | During the legal foreclosure process that works its |
| the homeowners failed to come to any kind of | | | | way through the courts, homeowners can |
| solution to resolve the foreclosure. This is not to | | | | request some assistance to work with their |
| mention having to move furniture where things | | | | lender. If they can come up with some |
| break, get lost, get stolen, or need to be moved | | | | repayment plan with the lender and meet the |
| into storage. Thus, avoiding foreclosure is in every | | | | requirements of the plan, then the loan will be out |
| homeowner's best interests, if at all possible. But | | | | of foreclosure. To accomplish such a plan, even if |
| few foreclosure victims really know what to | | | | the representatives from the lender turn it down |
| expect when facing foreclosure, how such | | | | directly with the foreclosure victims, the |
| processes as short sales and deficiency | | | | homeowners can request that the court give |
| judgments work, and what options they could | | | | them a hearing in order to work out a solution |
| really qualify for, both in and out of the court | | | | with the lender. A settlement can be reached that |
| system. | | | | keeps the house out of foreclosure, especially if |
| Adjustable Rate Mortgage Increases | | | | there is enough income to pay extra every |
| If the homeowners have a mortgage that is | | | | month to pay back the arrears. |
| going to reset in the next few months, then it is | | | | Foreclosure is simply the legal process of |
| important to discover what the payment will be | | | | attempting to sell a piece of real property in order |
| after it goes up. If it is affordable, then the entire | | | | to pay off a defaulted loan secured by that |
| situation might still be alright, if not as comfortable. | | | | property. If the owners and the lender work on |
| But if the payment will be too high too foster a | | | | some other, mutually agreed-upon process, then |
| stable financial environment, then they will have to | | | | they will hold off on continuing the foreclosure. |
| figure out another solution. | | | | Then, once the repayment plan, loan modification, |
| The best option is probably to examine the | | | | or other solution is completed, the loan will not be |
| possibility of a refinance to prevent foreclosure | | | | in default for any money at all -- therefore, no |
| first, especially if the mortgage is being paid on | | | | legal grounding to pursue foreclosure. |
| time now and the homeowners' credit is pretty | | | | Filing Bankruptcy to Stop a Sheriff Sale |
| good. Qualifying for a refinance in the midst of the | | | | Chapter 13 bankruptcy is a legal process that puts |
| current foreclosure crisis may not be as easy as | | | | a hold on the collection of any debts until a |
| it was a few years ago, but this is still an option | | | | court-ordered payment plan is established. It also |
| that can help homeowners with stable incomes | | | | puts collection activities on hold, such as any |
| and decent credit to avoid the possibility of facing | | | | further foreclosure proceedings, for as long as the |
| foreclosure down the road. | | | | homeowners are making payments on the |
| Voluntarily letting the property go into foreclosure | | | | bankruptcy. |
| should be the very last option, in the event that | | | | Because of the automatic stay of collection |
| homeowners have tried everything else and just | | | | activities, filing a Chapter 13 bankruptcy will |
| can not unload the property through a sale, short | | | | automatically put a hold on the foreclosure |
| sale, or deed in lieu of foreclosure, and can not | | | | process, which is one reason it is used frequently |
| keep the property. It is almost never a good idea | | | | to stop a sheriff sale. It does not save the house, |
| to start thinking of letting it go into foreclosure | | | | but merely gives the homeowners another |
| until the homeowners seriously can not afford the | | | | opportunity to repay the defaulted amounts and |
| house anymore due to the increased payment. | | | | get the loan current again over time, under the |
| Being Sued for a Deficiency after Foreclosure | | | | protection of a court-ordered plan. |
| The lender probably will not go after a deficiency | | | | If the owners miss a bankruptcy payment, the |
| by suing the former homeowners after the | | | | house will go back into foreclosure at the point |
| sheriff sale, unless they know that the foreclosure | | | | that it was left off. The lender does not have to |
| victims have a lot of liquid assets and went into | | | | start the whole process over again, and it will not |
| foreclosure just to avoid paying some of their bills. | | | | hesitate to try any way possible to have the |
| Obviously, this is a rare occurrence, and if that is | | | | house removed from the bankruptcy at every |
| not the case, then pursuing the deficiency would | | | | point. Banks do not like having to deal with |
| most likely cost the bank more in time and | | | | homeowners who have missed numerous |
| money to sue after the foreclosure than they | | | | mortgage payments and then file for bankruptcy, |
| would ever be able to collect. Lenders almost | | | | as they see little reason to believe the mortgage |
| never sue the homeowners after the house has | | | | will ever be paid on time again. |
| been foreclosed, because they know there is little | | | | There are a number of different aspects of the |
| chance of recovering any of the judgment, and | | | | foreclosure process that homeowners need to be |
| the bank will not want to act as a collection | | | | made aware of, if they have any real hope of |
| agency. | | | | understanding the process and making a stand |
| If the homeowners sell the property through a | | | | against the loss of their homes. Without at least a |
| short sale, where the bank takes less than the | | | | basic understanding of how foreclosure works and |
| total amount owed on the mortgage, there is no | | | | what methods are commonly used to stop it, |
| deficiency, and the loan is shown as paid in full on | | | | families may find themselves taken advantage of |
| the credit report. The lender forgives the | | | | by their lenders, scam companies, or just miss |
| remaining amount of the debt that is not paid | | | | out on valuable opportunities to save the home. |
| through the short sale, and can not sue for debt | | | | Adjustable rate mortgages, deficiency judgments, |
| it has forgiven. The homeowners may have to | | | | court procedures, and bankruptcy to avoid |
| pay taxes on the amount forgiven, though, since | | | | foreclosure are just a few issues homeowners |
| the IRS considers this to be income, as if the | | | | should begin to research when facing the |
| bank gives them the extra money to be used to | | | | possibility of having to save their homes from |
| pay off that portion of the mortgage. However, | | | | foreclosure. |
| all homeowners should consult with a tax adviser | | | | |