Foreclosure seems to be the last option for both the borrower and the lender. This is especially true of the borrower who generally wants to do everything possible to avoid foreclosing. But the truth is, it does happen and as you can tell from the current housing market, it happens far more often than anybody wants.
If you find yourself in this unfortunate situation, it’s important to know your foreclosure rights as a homeowner. You’ll want to make the best of what is obviously an undesirable situation.
It’s important to note that foreclosure rights vary by state. You’ll want to check local law where you live to make sure you fully understand your rights. What follows is more of a general outline of what you can do if foreclosure is becoming a real possibility.
- Right of redemption. in many locales, there is a process called redemption that allows you to buy back your home within a certain window of time near the sale date. In some cases, the right of redemption might end upon sale, but in other states, it can last up to a year after the sale.
- Lender negotiation. Even though your lender may have served notice that the home will be put into foreclosure, you can always negotiate. Professional loss mitigation companies can actually help you come to terms with the lender that allow you to avoid foreclosure altogether.
- Sell the home. Try and sell your home before foreclosure can take place. If the home can’t be sold for enough money to pay off the loan, try a short sale. These are extremely common nowadays and lenders often approve short sales to avoid the foreclosure process.
The foreclosure process is expensive and time consuming for lenders and there is no guarantee that they will get more than the opening bid – the actual outstanding amount plus other expenses – at the auction of the property. In other words, you may be looking at foreclosure, but it’s not the final word. You have rights and you may still be able to save your home.
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