Ever since the credit crunch began, foreclosures have been on the minds of many. But what is it exactly? A foreclosure is actually a process that takes place when homeowners do not pay their mortgage payments for a period of time, usually when it exceeds 3 months. Having said that, the time frame varies between different lenders, with the foreclosure process starting in about 2 months from the first late payment by homeowners.
Banks are often vilified for being too eager to go down the foreclosure path, but this is not entirely true. In general, banks would prefer to reach an acceptable agreement with homeowners and would only use foreclosures as a last resort, as this exercise would cost them time and money. Banks prefer to spend their efforts looking for investment opportunities to grow their organization.
Banks often give homeowners several opportunities to make their payments to avoid foreclosure. Banks know that once a homeowner falls behind on payments, it will be more difficult to catch up on those missed payments. However, they usually show great restraint, knowing that the owner is doing everything possible to maintain their home.
Typically, if the bank can see that an honest attempt is being made to catch up, it will delay the official process and give the homeowner a chance to keep their home.
If you’ve done everything you can to avoid it but still end up being repossessed, keep in mind that it’s not the end of the world, although it’s easier said than done. Although this situation will affect his credit ratings, he can still recover and eventually own a home.
Keep in mind that you will generally be given up to 60 days to move out of your home when it is foreclosed on, and you will not be forced to move immediately. There are even situations where you won’t even have to move until the bank finds a buyer for your home.
In addition to federal foreclosure laws, each state will also have its own specific additions or amendments to these laws. Therefore, it is recommended that you try to find out what they are so that you know your rights. Like bankruptcy laws, they can be quite complicated and therefore it is recommended that you consult an attorney who can help you understand all of these laws so that you are aware of all of your protective rights.