Facing Foreclosure: General Proceeding: part 1

Facing Foreclosure: general proceedings.

California is averaging 1 foreclosure out of 88 homes. Job loss, divorce and health problems are the main reasons people stop making mortgage payments. Many homeowners are also finding their fix rate near expiration or an adjustable rate payment greater then they can afford. Due to the state of the current housing market, many people are facing foreclosure. It’s all over the news, all those statistics and explanations about what happened doesn’t tell us what to do next. This series of blogs is intended to reach those who are looking for answers and common ground. Please feel free to post your own experience, questions and answers.

The American economy is strong enough to overcome the trouble in the country’s housing market although the subprime mortgage crisis may take longer than expected to resolve, say U.S. Treasury Secretary Henry Paulson. Housing is 1/3 of the U.S. economy and will continue to be a long-term growth asset. The Feds and US government is showing support for homeownership making FHA programs available to those in need. Homeowners need to begin believing in their home and holding for long-term return.

Depending on various factors, the borrower’s financial history, assets and case there are different solutions. Foreclosure doesn’t happen overnight. Typically a borrower is 60-90 days past due on payments before their lender will consider them in default. Before you miss a payment, begin consulting with your lender, lawyer, CPA, asset manager, loan consultant and Realtor.

The common initial reaction is to run and avoid the phone calls after you’ve already missed a payment. The reality is the sooner you contact your lender and begin working out a repayment plan or postponement of foreclosure proceedings, the more time you’ll have to resolve the situation. Lenders do not want to foreclose on your home, even more so with the state of the economy and housing market.

For many, any one of these scenarios is likely: refinance, payment plan with lender, sell, short sell, a deed in lieu of foreclosure, foreclosure, or/and file bankruptcy. Because financial and estate laws are complicated, have different legal and tax consequences there is a different solution to each individual, and a borrower must consult with their lawyer to determine which is best for them.

Without a doubt, this is a stressful time for any homeowner. Aside from dealing with the personal factor of a loss (job, love one, health), one must stay focus and strong to manage dealing with another most important asset, their home. The only common solution that all homeowners facing foreclosure must do is not let depression get the best of them. Regardless of how busy our lives are with kids, family and work we must make it our priority to take care of our financial health and home. Wake up early, use your lunch hour and instead of watching TV after 5, start calling your lender, loan consultant, and lawyer, make it your priority and second job (looking for another job should come first) to resolve the situation to avoid foreclosure.

In our modern day society, too often if a goal is difficult to achieve, takes too long to work through, does not give us instant gratification, we just give up. This general consensus gave justification to the popularity of sub-prime, adjustable loans that qualifies everyone into an unaffordable home. Now foreclosure seems like an easy solution, dealing with legal and financial issues, reading through fine print and putting the puzzle together over the next 6-9 months is tedious. Foreclosure is not meaningless a word, like bankruptcy there are greater consequences that will make it difficult for one to build for retirement and securities at a later point in time. The gratification for all that work, plus another seven years of ups and downs is homeownership, “real� equity and financial security.

Stay connected for Facing Foreclosure, Part 2: Refinancing into an FHA loan.
Real Estate Answered is blogged by
Cindy Chen, PMZ Realtor.