Mar 12, 2008
Dealing Firmly With Foreclosures
The foreclosure is not a paper tiger – it is real. Thus the danger from it should not be underestimated. It is on the loose prowling around the country terrifying people and causing havoc. The havoc is caused more out of panic. The tiger has to be caught and jailed by keeping a level head.
The foreclosure is a legal process by which the lender to whom a property has been mortgaged against a loan realizes unpaid dues by seizing the unit. The lender has to prove to the court the matter and get permission from the law to do so. As such foreclosure is nothing new – it has always been a part of the lending and borrowing world. Of late the word ‘foreclosure’ has been making the rounds across the country and globe because of the sheer weight of its numbers affecting the basic socio-economic fabric of the nation.
Foreclosures spell doom as regards credit ratings. So the question is how to avoid it? There are many options. The first thing is to seek counseling from authorized advisors while simultaneously opening a dialogue with the lender. Given the present scenario the latter are only too willing to talk. The lender might allow some time for the borrower to get over a bad patch and catch up on payments in installments. Alternatively the lender might agree to refinancing or modification of the loan. One of the best options preferred by both parties is the selling of the house. If there is some equity left on the house then this should not pose a problem. But lately because of the plunge in the real estate the value of the house is less than the loan. In this case the lender sometimes foregoes the loss to avoid foreclosure as the latter will cause greater financial losses.
There are two ways of selling the house. The owner can do it personally through for-sale-by-owner. It will involve a lot of hard work advertising the property, arranging reams of paper work and paying heavy commissions (nearly 6%) to agents from both sides. At the end the exposure will not be as wide as MLS or multiple listing service schemes. Here the agent in tandem with others advertises on the Internet giving all the details including photographs. The best option is FlatFee MLS scheme by which a nominal one time fee is paid for the exposure on the Internet and the chances of selling the house greatly increases.
