Foreclosure law refers to the legal rules that guide the means by which a mortgage creditor can take possession of a home and sell it once the borrower has defaulted on the loan he is to pay.
The money derived from the sale of the house is then used to pay the balance of the loan, with the new buyer owning the home free of the mortgage.
If the proceeds from the sale of the house so happens to not cover the remainder of the money owed, the borrower would be held responsible for the balance.
The following include steps that can be taken to avoid foreclosure
Step One: Reach out to your Creditor
The sooner you realize you are going to have trouble paying off your loan, the sooner you should contact your creditor and inform them about your financial difficulties.
This provides them with ample opportunity to help you create a plan. It is important that you do not wait until you are unable to make payments before you take action.
Step Two: Work with the program of MHA.
MHA or Making Home Affordable is a program that provides help to debtors and provides free counselors that will guide and assist you in keeping your home or getting you out of it safely.
Also, it is possible that the housing agency of your state have their own foreclosure avoidance program, which you can make use of.
Strategies that could be implemented include;
This refers to the process where the creditor agrees to suspend receiving payments from the debtor for a period of time.
This refers to the creditor changing the terms associated with the loan, in order to make it more affordable and easier for the debtor to refund.
These changes are however permanent and range from reducing the price paid monthly and extending the period of payment.
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