In recent years, the term “foreclosure” has become increasingly (and distressingly) common to hear. No one wants to enter into foreclosure with their home, even if they don’t fully understand the meaning of the term. At its most basic, foreclosure is essentially the process by which a lender (usually a bank) tries to reclaim delinquent money. For instance, if you are unable to make the loan payments on your home for a predetermined period of time, then the bank (or other lender) may place your home into foreclosure as a way to retrieve either the money owed or the actual asset (in this case, real estate property).
Many people fear that going into foreclosure is the same as an immediate eviction, but that’s not exactly the case. Indeed, there are situations that could turn out favorably, even if your home is foreclosed upon by a lender. The best situation for both the lender and the homeowner is paying the mortgage off and voiding the foreclosure proceedings. There are few lenders who actively want to foreclose on homes because of all the fees and legal issues involved. Both parties would be much happier if you could pay the mortgage and continue living in your house. In some cases, paying the mortgage involves refinancing—often using another bank or lender—to restructure the loan and get a better, more manageable interest rate.
Of course, in other cases, you may be forced to use credit cards or sell off your valuables like automobiles. It is almost never ideal to substitute something like credit debt for mortgage debt. The idea is that you want to avoid debt altogether, but that’s not always easy. Still, for some people, keeping their homes is the highest priority and they’re willing to achieve that goal no matter what.
As real estate expert Matt Battiata might tell you, sometimes keeping your home isn’t in your best interest. Although it is frequently the most ideal outcome, it may not be the most realistic. One way to end foreclosure proceedings is to sell your house for its current value (or more than its current value) and use that money to pay off the mortgage. This is why Matt Battiata reviews all listings with his company to ensure that his clients are getting the best possible deal when facing foreclosure.
Selling a home that’s in foreclosure can be difficult, especially when you’re under the gun from the lender to come up with the mortgage payment. The lender has the right to auction off the property after a certain amount of time (depending on state and local laws). If you sell the house even one day before the auction is set to take place, then you can avoid losing your house (and your money) altogether.
If push comes to shove, bankruptcy may actually be a viable option. With no cash and no potential buyers, the bank can either auction off your home or seize the property. In both instances you lose your home with nothing to show for it. Filing for bankruptcy, however, delays the foreclosure process temporarily so that you can either come up with the cash or sell the home. For best results, you should probably contact a real estate expert like Matt Battiata to see what the best course of action is in your particular case.