Real Estate Foreclosures

Probably one of the most depressing things that could happen to anyone is losing their home. The fear of losing shelter is something that we all pretty much want to avoid because of course, the roof on our heads is one of the basic things we need. As much as we want to avoid it though, real estate foreclosures happen, and it is becoming common in the present economic situation.

There are two types of real estate foreclosures

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Types of Real Estate Foreclosures

Many people are hearing from lenders that their homes are in the nick of being foreclosed, but many do not really know what it means. Foreclosure simply means undergoing a legal process in which the lender will try to recover the balance of the home loan from a borrower who has not made any payments for some time; this is done by force selling the property. There are two types of real estate foreclosures, both have their own advantages and disadvantages, these are:

Foreclosure by power of sale. This is for ‘deed of trust’ properties and for mortgage properties which have a power of sale clause in the contract. This process is also called non-judicial foreclosure because of the non-involvement of the court in selling the asset. The process is faster, and thus, less costly for the lender.

Foreclosure by judicial sale. This process is simple; the court will assist in the sales process and they will decide which portion goes to each party. Most states require this type of foreclosure, and most borrowers like this kind more than the power of sale. It is a more careful procedure, therefore slower than the previous type of real estate foreclosure.

Avoiding Real Estate Foreclosures Altogether

Is there a way not to get into real estate foreclosures? Yes!

The most effective way to avoid this situation is to work with your lender. Sadly, many homeowners do not want to talk with their mortgage company because they do not want to divulge that they have money problems. Another thing that borrowers are afraid of is that their lenders will start the power of sale procedure once they discover that they could no longer fulfill their financial obligation due to some issues. If you are in this predicament, then you should be glad to know that loan providers do not want to sell your house. In fact, they know that they will have to spend more money when they start the foreclosure process, so instead of doing that, they will just assist you in your issues.

When you call your lender sooner, chances are you will have more options. They can help you create some strategies and payment plan in order to ensure you will be able to keep the house. They will discuss help with you, so work it out with them. They will ask about a few things like your monthly expenses and your household earnings, and then they will help you in setting up a monthly budget system that you can follow. They may also be able to offer you deferred payment plan or offer to reduce the amount of loan or interest.

If you are finding it difficult to talk to your mortgage lenders, then you might want to hire the services of a foreclosure attorney or a housing guidance organization. They can either talk to your lender, or lay out an effective strategy that can help you keep your home.

It is very important that you reach out to the lender if you are in the brink of foreclosure. This situation is a long and emotionally tasking process, so if you can settle it outside of real estate foreclosures process, then it is better.

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