©dialabank.com - flickr

©dialabank.com – flickr

Lately I have been hearing some amazing thing, from people and there thoughts on foreclosure.  Some people have told me they are just ignoring their foreclosure and really think that after time the bank will not take their home away, especially since they don’t have any equity on it.  Others have come up and said they have filed bankruptcy and will just do it again to stop the foreclosure since their credit is messed up anyhow.  These along with a few other things are common statements I hear, today I’m going to clear up the air and hopefully help so people who think their foreclosure will just disappear if they don’t do anything about it.

I have filed bankruptcy once and now I’m going to do it again to stop the foreclosure.
Okay first off depending on how long ago and what type bankruptcy you filed; it will effect how soon you can file again.  If you filed a Chapter 7 bankruptcy you will have to wait eight years until she can file for it again.  With a Chapter 13 bankruptcy, you will likely have to wait four years.  Filing for bankruptcy can slow the foreclosure process but it won’t likely stop it.

My home has no equity, so there is no way the bank will foreclose on it.
Yes if she has no equity in the house the bank will still foreclose, even if a person has negative equity in the home, the bank will still take their home.

There is no point to talking to my lender they won’t help me.
This just isn’t true, banks would much rather try and work out a plan with you then take your home.  What you should do is set up a meeting to talk with her lender as soon as you think you may be facing foreclosure and try and work out a loan modification plan.  A loan modification is a change in the terms of a loan, usually the interest rate, payment or term, making the payment more affordable for you and helping avoid foreclosure.

I can’t make the payments so there is nothing that can be done.
If you has no way of making any payments on her home, you may want to also talk to your lender about a deed in Lieu of foreclosure.  This is where the lender agrees to take over ownership of the property and you voluntarily deed the property to the lender.  Or you may also speak to them about a short sale on the home. A short sale is when the lender accepts a payoff for less than what is owed on the loan. A lender will generally approve a short sale when a home has decreased in value and more money is owed than the home is worth.

I’m a year behind in payments, so the bank will make it easier on me.
The bank is not going to make it easier on you because you’re almost a year behind in payments.  In fact this is going to annoy them more, lenders prefer to be contacted as soon as you miss out on a mortgage payment.  The sooner you contact them when your facing foreclosure, the more options the will have for you.  The longer you wait, the less help you are going to be able to get.

Finally don’t just wait around hoping the problem of foreclosure will just go away.  I hear too many stories everyday where people, wait around thinking nothing is going to happen and then before they know it, there is a sheriff evicting them from the home and the property goes up for auction.

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