What to Do When Faced With Property Auction
February 7, 2010 by admin
Filed under foreclosure auctions
When faced with a crisis such as your property being danger of getting into one of those foreclosure auctions, you have to face the problem head on. Listed below are tips to let you do something so your house won’t become a property auction. You could do this with the help of deal-makers, who, more or less, could be the most helpful people to turn to in times like these :
How to Avoid Property Auction Option #1: Work with their Current Lender
Forbearance: An agreement between the lender and the borrower that reinstates the delinquent loan because the homeowner will put up an initial lump sum of the total delinquency and pay the rest over a period of time.
Loan Modification: A change in any of the terms of the original note. This includes decreasing the interest rate, re-amortizing the remaining balance, extending the term of the note.
How to Avoid Property Auction Option #2: Work with a New Lender
Refinance: Where a new lender loan the borrower monies to pay off existing debt. This option is generally open to borrowers that face a temporary setback in their financial situation and can prove that they can afford the new mortgage payment. Most financial institutions will not loan to people unless they have the above mentioned criteria and at least 20% equity in the residence.
Junior Mortgage: Where a new lender will offer a second loan or junior lien in order to make up any back payments, late fees and other charges necessary to reinstate the loan. Rates are typically 12%-18% and terms are 5 to 10 years.
How to Avoid Property Auction Option #3: File Bankruptcy
Bankruptcy is a way for people who owe more money than they can pay right now, to either work out a plan to repay the secure creditors over time in Chapter 13 filings, or wipe out (discharge) most of their bill in a Chapter 7 filing. While the debtor is working out a plan, or the trustee is gathering the available assets to sell, the Bankruptcy Code provides that creditors must stop all collection efforts against the debtor. What happens to your bills, debts and house will be controlled by the Bankruptcy Code and the Federal Rules of Bankruptcy(the owner will NO longer have control over any of their assets). Bankruptcy will have a serious impact on the credit lives for the next 10 years.
