When you are facing foreclosure, the first obvious step you should take is to approach your lending bank. It’s always best to do this before the foreclosure actually arises. Even once it does, it is still not really too late to schedule a meeting with your lender at your bank. If you can prove to them that you intend to and can get your mortgage back in good standing, or your financial condition is only temporary, your lender may just hold off on foreclosing.
The Banks Don’t Want To Do It
Look Out For Investors
Another option open to you as a homeowner during foreclosure to hire an attorney. When doing so, find one that specialties in foreclosures or real estate. A lawyer will usually advise you on what the next steps are to take. They will also help you understand the pros and cons of pre-foreclosure sales. In some US states, attorneys will and suggest using bankruptcy as a tactic to stop the foreclosure proceeding. Although this is not a long-term fix, it may buy you more time to make the right decision. It’s important to note that bankruptcy itself has its own advantages and disadvantages.
Most states have what are commonly known as redemption period laws. These laws are designed to protect you as a homeowner. They give you a stated grace period to reclaim back your home. If you can then make good on your mortgage payment, the foreclosure proceedings will stop. The States that have these laws in place, often allows you to reclaim your property back, even after it has been already sold at a foreclosure auction. This provided you act within the allotted time period.
If you happen to live in a State where you’re not given a grace or redemption period, you still have the option of buying your home back. Anyone can place a bid in for a foreclosed home at an auction. With that said, placing a bid and winning the bid are two different things, as it usually takes a significant amount of money as a down payment to reclaim your home. Your lender will also most likely attend the auction waiting to buy the home. If the bids happen to be not high enough, the bankers will usually buy the home themselves. This is done to minimize the potential money lost in the home. Later, your home will then be available for sale again as a REO (Real Estate Owned) home.