Foreclosure Victims

Why would someone miss making mortgage payments and end up looking foreclosure in the face? The basic reason is that the homeowner?s finances are over stretched and so mortgage payments are falling by the wayside.

Some of the most common causes for foreclosures are:

Financial stress caused by bad investments or overspending.

Personal problems like divorce or separation. When one partner moves out of the home, the other partner has to shoulder the burden of mortgage payments alone. What was once a joint payment suddenly becomes the responsibility of a single individual. This may make it difficult for the individual to make the required payments.

Unemployment: With no income, unemployed people often fall into the trap of defaulting on mortgage payments.

Death or Jail: in such situations the person is not there any more to make the payments and the family refuses to take up the responsibility.

While these are the common reasons for overdue payments building up, there could be a number of other causes or a combination of any of these which may lead to foreclosure.

People react to a pending foreclosure in different ways. Some are unable to deal with the pressures and choose to walk away. This however, dooms the property and chances of the homeowner recovering it are very few. The homeowner?s credit rating too is adversely affected.

Others may choose to fight the foreclosure by working out a settlement, selling their property, considering refinancing or a host of other options that are available.

The lender too is interested in working out ways by which foreclosure can be avoided. Foreclosures amount to bad loans for them and so are encouraged only in dire situations. Further when they foreclose, they invariably sell the property at a value that is less than its market price. Thus having the loan run its course is far more profitable for the bank.

The best way to tackle missed payments is then to get in touch with the lender at the earliest. If the homeowner?s credit ratings are good and the situation leading to dues building up seems temporary, more often than not the lender will be willing to work with the homeowner to sort matters out.

If a workable solution cannot be arrived at, the wisest course of action would be to sell the house and thereby get back some of the funds invested in the property. Selling would also prevent the homeowner?s credit rating form being adversely affected.

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