The Essential Laws of Resources Explained
Is Pre Foreclosure the Answer to Foreclosure Homes?
So many Americans and people globally are losing their property because of foreclosure annually. Some of the lenders simply don’t care about their clients while others aren’t extending their diligent enough. Of course, there are circumstances wherein there’s a sudden turn of events towards a person’s life which leads to their inability to pay for their mortgage.
It doesn’t matter what is the reason for why the client starts to lag on payments because from that point, it’s set. What the lender will do first is file for a public default notice. This is going to kick off the process of foreclosure and at the same time, this is the point when it officially starts the pre-foreclosure. Simply put, pre-foreclosure is the homeowner’s grace period to settle whatever issue they have in their home.
The homeowner will be warned that they’re in default and need to take actions in solving it. But at this point, the lender can’t claim the property back and sell it to recover their costs. The length of grace period is going to vary as it is determined by the state laws. There are state laws which have grace period lasting for 6 months but most have shorter periods than this. Right after the property has entered pre-foreclosure, there are numerous ways that homeowners can avoid facing foreclosed property and be sold by the lender. Two of the common options available are discussed in the next lines. If you want to learn more about it, I suggest you to keep on reading.
Number 1. Pay off the default – however, the property will be removed from pre-foreclosure in the event that the homeowner wasn’t able to settle the default amount. In the event that the default amount is small and that the default was caused by temporary glitch, then it might be worthwhile to take out personal loan to repay the debt. The homeowner has to take quick actions immediately because if not, it will cause more problems in the end.
Number 2. Sell the house – if all else fails and you can’t really make paying the default amount, then selling your house is the next logical move to make. By selling the house, you as a homeowner can get reasonable price for it. It is never a smart move that you wait for the lender to sell the house because they are going to sell it in a lower price in an effort to get rid of it. This is due to the reason that the lender will want to offload the property for as fast as possible.
While there are options for you to avoid foreclosure, still it will be recommended that you make your best efforts to not get to this point.