Many people facing the threat of foreclosure choose to file for bankruptcy to try to prevent the foreclosure from moving forward. One of the benefits of bankruptcy is the "automatic stay," which prevents your creditors from moving forward with their efforts to collect on your debts. In most cases, the automatic stay will also apply to your mortgage lender and prevent the lender from foreclosing on your home.
You might have been financially stable when you purchased your home, and your mortgage may have been well within your budget. However, anything can happen to change one's financial circumstances and render a mortgage impossible to pay. If something like this has happened to you, and you can no longer afford your mortgage, you might want to pursue a loan modification.
The average American homeowner knows the hard work it takes to maintain a residence. Depending on how long you've owned your home, you may have invested a lot of hard-earned money into paying the mortgage on a monthly basis and you may have accumulated a considerable amount of home equity that you don't want to lose.
A loan modification can be a very effective way to avoid a foreclosure on your home, and you might be surprised by how willing your bank is to negotiate a modification with you. In fact, banks don't want to foreclose on your home -- they'd rather profit from the interest paid by your successful completion of your mortgage payments. As such, banks are often willing to work with borrowers in order to keep people in their homes, and keep them on track with their payments.
No one wants to get involved in a legal proceeding, but when the legal proceeding involves losing your home, the process can be particularly unsettling. This is precisely what happens during a home foreclosure, so most Texas residents will do everything they can to avoid the foreclosure process.
The United States is still reeling from the memory of the so-called "Great Recession," in which many people lost their homes as a result of foreclosure. Some families continue to struggle financially as a result of the Great Recession, but recent news points to a ray of hope: U.S. foreclosure activity has fallen to an 11-year low.
The best way to prevent foreclosure is to pay your home mortgage payment on time each month, but what if your financial circumstance change for the worse and you're no longer able to pay your bills? Getting behind one month on your mortgage bill will result in costly fees, but getting behind by more than a month for any period of time could result in foreclosure.
If your mortgage is "underwater," it means that you owe more money on it than your residence is actually worth. This can happen to homeowners who take out a loan and buy a property before the real estate market starts to change for the worst. When property values decline, you could find yourself dealing with an underwater mortgage.
Do you know what an "underwater mortgage" is? Maybe you know exactly what it is and you're sorry that your home is currently worth less than the amount of money you need to pay on it. With the current state of the Texas real estate market, there could be many homeowners who -- after their homes declined in value -- owe more money on their homes in mortgage loans than their homes are actually worth on the market.
When homeowners get behind on their mortgage payments, the threat of foreclosure is a terrifying experience. That's because homeowners stand to lose a lot that they have worked so hard to obtain financially. Even worse, their families could become homeless if they are unable to pay for a new home or apartment to live in.