Don't lose your Home, you have options

9/08/2016


In my lifetime, I have seen so many people lose their homes. And it's not that they are careless with their money.

There are many reasons good people fall behind on their home loans. It’s not always because they are careless with their money and they end up being in debt. Sometimes people lose their jobs, become ill or injured or things just happen that make finances tighter than expected. It’s not shameful or bad--it’s just a situation that everyone wants to work out.

With the general increase in the cost of living, home owners and property investors are finding it increasingly difficult to keep up with their home loan repayments. To add to the challenge, home owners are also finding it difficult to sell their properties in order to get out of the debt, due to the general slow down in the economy. And when they do sell,  their properties are sold for less than what they were bought for.

If you are having difficulty paying your home loan, don't be ashamed to act, or go into denial about the seriousness of the problem. Be decisive and explore all solutions available to you.

So this is how the process of repossession works: 

The terms of most home loans require a payment by a certain day of the month and include a grace period for the payment. If you fail to make a payment before the expiration of the grace period, a representative from the bank or lender will start calling you, and try to get a commitment from you to make the payments. If this commitment is still not honoured 3 times in a row, it will be handed to another department, where you will be given +/- 30 days to rectify the problem. After this, if the problem still persists, the bank will start legal proceedings. Their legal department will make arrangements for you to either sign a Power of Attorney in favour of the bank to market/sell your property or you can arrange to list the property independently. Further legal action to blacklist you and repossess your property will be taken if this does not remedy the situation.

Foreclosure is the legal process that your home loan lender uses to take your home when you fall behind on your mortgage payments. If you are faced with foreclosure, you can work to save your home—or at least limit the financial damage caused by foreclosure—if you understand your options and take the appropriate steps.

To help get you back on track, here is what you need to do:

Admit there is a problem. 
Being willing to admit that you can't pay your home  loan is the first step. If there is another party on the loan, talk with them about the options to get it paid. Communication is the key to solving this issue--denial will only bring on a certain foreclosure in the future.

Call for your bank
Falling behind in your mortgage can be a terrifying experience, but you do not have to face it alone. More than half of homeowners facing foreclosure did not call for help when they fell behind in their bond payments. Do not make a bad situation worse. Ignoring your situation will not make it go away. Take the steps listed to protect your home, your family, and your credit rating. Calling your bank is a step in the right direction. They will advise you of the various loan workout options available to you; and work with you to develop a plan of action to help you avoid foreclosure of your home.

Avoid scams.
When you are facing a financial difficulties remember there are always unscrupulous people willing to lure you with promises of a “quick fix.” Beware of dishonest investors, predatory lenders, too good to be true pre-approved loan offers, and phony counseling agencies. Homeowners facing financial troubles are especially vulnerable because they are desperate to find a solution to their problems. Do not sign anything! Any and all offers should be reviewed by your bank to ensure the offer is not a scam.

Tip
Make sure that everything offered by your bank/lender is in writing, and keep notes of conversations. The more paperwork you have documenting your attempts to work it out, the better. If you got behind because of an unforeseen situation, you may be able to buy a new house sooner than you think. It’s important to document why it happened and how you tried to prevent it from happening. This can be shown to the next lender to explain why the home was lost or modified.

Give yourself the best chance of keeping your home or selling it on your own terms, by contacting your lender or seeking legal advice.

Stay in communication with your lender. If your lender is calling, answer the phone--don’t avoid the calls.

Remember, taking action immediately is so important. Your first priority should be talking to your lender and getting legal advice if the lender is taking legal action.

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