An alert property owner can use a little known fact to their benefit to try to stop foreclosure by their mortgage lender. Did you know that it is cheaper for lenders to work with you to stay in your home than actually go through with a foreclosure? On average it costs the bank between $50,000 and $100,000 to foreclose on a residence. In the long run, it would cost less for them to negotiation with the property owner to find a solution to the problem than evict them from their home. Many times, the home owner has to be the one to ask for an alternative option from the bank though. It can be a “win-win” negotiating tactic.
What are the costs to foreclose? First there are the expenses of going through the legal process of eviction. The banks have to hire local attorneys that specialize in these types of procedures. Then there are expenses associated with filing the lawsuits and eviction actions. If the property owners retaliate, then the lender’s legal expenses begin to rapidly increase. Once the legal action or eviction notice is final then the mortgage company has to absorb the expense of evicting homeowners if they oppose leaving the dwelling willingly. A lender with any intelligence would want to work with a home owner to stop foreclosure.
After obtaining the property from the evicted house owner, the mortgage holder is then left to deal with the consequences. Often, if a home owner doesn’t have the cash to keep up their house payments, they also didn’t have the money to keep up the property either. And some of them, in anger over what was going on, devastate the property before they get evicted. All of this now falls on the bank to handle. Whether the residence was damaged due to neglect or spite, the lender will usually not do anything about it. This makes the value of the home fall and the longer it is neglected the further the value falls. In the end, the bank will receive far less for the home than what they would have if they had worked with the owners to stop foreclosure before it began.
Even if the bank doesn’t do anything to repair the property, they still have to deal with the additional expenses in owning that home. Any taxes that are due on the dwelling have to be paid by the bank. And, some level of home owner’s insurance will be required on the property to protect the lender from accidents to the home. And when they try to move the property, the mortgage lender will need to use local real estate agents. That means they will accumulate commission fees when the property is ultimately sold. It just makes no sense for a mortgage company to incur those costs when it would be more effective for them to work with the current property owners. This is just one piece of information that can help you to stop foreclosure.
Nick publishes articles for the ForeclosureFish site. These articles provide advice to families facing the loss of a home, describing various methods they can use to stop foreclosure. The site examines numerous options, including mortgage modification, foreclosure loans, deed in lieu of foreclosure, filing bankruptcy, and more. Visit the site to find out more about how foreclosure works: http://www.foreclosurefish.com/