Although the dark days of the Great Recession are far behind us as a nation, America still sees an alarming rate of people losing their homes. One of the leading reasons is foreclosure, which happens when banks and other loan-granting organizations claim a property because of a default on a mortgage. How can this be avoided?
- What are the reasons people may face foreclosure?
The laws in Connecticut and other states prevent the arbitrary seizure of property, so foreclosures should only happen after several months of no payment and no communication from the borrower. Debt, job loss and new expenses like children may lead to this poor financial position.
- How can people avoid foreclosure with the bank?
A bank may be interested in a partial claim, which is a loan it extends you to get your mortgage current. Extra fees and interest may apply in the future, so this is often a temporary measure.
- What about other options?
Forbearance involves a lump sum larger than a monthly payment made to a lender in exchange for their patience while you resume payments. Once again, this may lead to higher expenses in the future.
- What about more permanent solutions?
A loan modification actually changes the structure and amount of payments. A modification may make a loan’s term longer while lowering payments.
- How do I get help with these options?
An attorney may be able to help prevent foreclosure with one of these moves or another option. Legal representation is often helpful when dealing with banks and other creditors to stop a chain reaction of financial problems.