Tuesday, September 4, 2007

Specialty Financing And Foreclosure

Specialty Financing And Foreclosure

by Molten

It is an unfortunate reality that thousands of people are currently facing the possibility of losing their homes to lender foreclosure. The fact is that over the past several years, more and more people were put into risky loan products that appeared sound on the surface, but were really awash in consequences. Many of these loans featured attractive payments for the first few years, but those low payments are expiring and many people now have the task of trying to stop foreclosure.

Perhaps the single most important step any one can take is to contact the lender before defaulting on the loan. Almost every lender in this country has a program or two specifically for people to avoid foreclosure proceedings from taking place. The programs may differ, but they share a common goal: to stop foreclosure.

When you contact the lender directly, you will be advised of the programs for which you qualify, which can range from restructuring of the existing loan, refinancing the loan, or enrolling in a workout type plan. Any of these can be viable options, depending on your situation and how far behind you are. Know that no matter which option you choose, it will likely cause a dip in your credit score, but it is still nowhere near as low of a decline in rating than you would experience if you did not stop foreclosure.

The reason that these companies want to help is that foreclosing on a property is not ideal for a lender; they, more often than not, lose money on the deal. It really is a lose-lose situation; you lose your house, and they lose money. However, in some instances, the programs they have are not suitable for your situation; you may be faced with the prospect of selling the house to stop foreclosure.

This is obviously not ideal, but to stop foreclosure proceedings from occurring, and assuming you can sell the house quickly and for enough money to pay off the loan, then you may want to look into this. If you are facing foreclosure, then you will probably already be bombarded with mailers from investors who are hoping to make a quick buck at your expense. Unless you need to sell immediately, and cannot wait for a realtor to find a suitable buyer, and you are certain that the investor is going to follow through with the deal, then careful research of the offers can stop foreclosure.

The added bonus to this kind of deal is that your credit will not have been too negatively impacted and you can still shop for another loan on a new home. As you do, be wary of the specialty loans. Interest-only ARMs may look good from the outset, but unless your house is going to appreciate in value exponentially, or you know for certain that you will have a lump sum of cash on hand when the loan comes due, then beware. Otherwise you may find yourself back where you started, trying to stop foreclosure.

Overall, to stop foreclosure, the first step is to talk to the lender directly. If they can offer you a workout plan, a restructure, or even a refinance of the loan, then you can get out from under the possibility of losing your home. If these options do not work, then it may be time to stop foreclosure through the sale of the home. Whatever the situation, just know that to stop foreclosure, you need to be proactive in the process, because the lender is not going to stop the proceedings because they feel badly for you-the only way to stop foreclosure is to fix it, and fix it quickly.

Molten Marketing Member, James Redmond, has more suggestions and ways to avoid or stop foreclosure. Visit The Best Home Offer.com for help.

Article Source: http://www.myaddirectory.com

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