If you are experience financial problems, having difficulty paying your mortgage and are concerned about the possibility of foreclosure on your home, these foreclosure faq can help you better understand the basics of foreclosure. Losing your home is a prospect; you will want to learn as much as you can about foreclosures if it is a possibility in your situation.
Why Are There So Many Foreclosures Happening?
Suddenly, foreclosures went from rare to exceedingly common. There are a number of factors contributing to the financial difficulty individuals and families are facing which is causing them to lose their homes. Some of the reasons why foreclosure becomes imminent for so many individuals and families include:
- Poor financial planning. Too many households operate on a paycheck-to-paycheck livelihood. Not nearly enough people have money set aside for emergencies. So, when the emergency happens, they often are not prepared and end up struggling to pay their mortgage.
- The real estate market experienced a peak, also known as a bubble, and now that the market has gone down, individuals who purchased at the peak owe more on their houses than they are worth. This makes it difficult to consider selling when otherwise it may have been an option.
- Changes in the job market make it difficult to procure employment. People are experiencing longer unemployment terms. It can be difficult to pay a mortgage without a stable income.
- Emergencies happen, including medical crises, job loss and death. If there is no savings available, one emergency that keeps an individual from working for even just a few months can mean foreclosure.
Do Lenders Make Money on Foreclosures?
No, in fact, lenders lose a lot of money on foreclosures. They sometimes lose in excess of $50,000 on one foreclosure. That is why it is wise to work with your lender if you are behind on payments or struggling. Your lender has an incentive to work with you so that you can make good on your loan and keep your home.
It is a mistake to think that your lender cannot help you. Your lender is in the best position to help you if you are having difficulty making mortgage payments for any reason. Embarrassment often makes this step difficult, but it is far less embarrassing to have a conversation with your lender than it is to face losing your home.
How Common Is Foreclosure?
Foreclosure has sadly become common in America. An estimated one in two hundred homes is expected to be foreclosed upon. That translates to 250,000 new families every three months losing their homes.
What Feelings Are Associated With Foreclosure?
If you are facing the risk of foreclosure, you are likely to feel a mixture of any or all of the following feelings:
- anger;
- sadness;
- embarrassment;
- depression;
- anxiety;
- fear;
- overwhelmed; and
- helpless.
The important thing to remember is that your feelings are normal. In fact, they are healthy to experience in the wake of financial distress.
Who Can Help?
There are many agencies that can help you with your situation by offering you resources such as counseling and other community assistance. Because of the epidemic in the foreclosure and housing markets, many resources have been made available to assist families struggling. Be aware that help that costs money should be scrutinized strictly since there are lots of scams out there aimed at taking advantage of your vulnerable situation.
Getting Legal Help
If you are facing foreclosure, you may be concerned that the last thing you can afford is an attorney; however, many attorneys have developed payment plans and will work with you to help you stay in your home while you recover from set backs which have made if difficult for you to pay your debts. An attorney can help you figure out the best way to handle your financial affairs.
