When Your Finances Get Stretched Too Thin

Foreclosure is a swear word for most homeowners. As times get tighter and finances get stretched thinner and thinner, the high price tag of a mortgage payment can quickly seem like an untenable cost that is only dragging down you or your family. In that instance, while foreclosure may have a slew of negative connotations, it should be one of the options looked at, no matter how painful.

Your Stretched FinancesThe process of going through a foreclosure can be very intimidating. Your bank gets involved, your finances are scrutinized, and your way of life feels like it is going to go on trial. However, foreclosures are a natural part of the home purchase process and though they do not represent the best-case scenario, they can arise through no fault of the homeowner. Prolonged sickness or a sudden, unexpected financial burden can quickly spiral finances out of control.

What Should I Do First?
If you feel that your finances are beginning to get away from you, contact your bank or lending agency directly to notify them of the situation. No banker or lender likes going through a foreclosure, but remaining open and accessible during the process can make it easier for both you and your lending agency. Notifying them initially is the first step in that process and one that should be taken if you feel that you will not be able to meet your mortgage obligations.

Depending on the size of the obligation left, it is possible that your bank may work with you on a revised payment schedule to make sure that the bank gets paid and you ultimately satisfy your loan amount. The reason for your financial distress will also play into the arrangement a bank may make, so if it is likely that you can resume payments at a later date, you might see some lenience from the bank. Of course, none of this can be done without first contacting your lending agency at the first hint of trouble.

Is it Painful?
The amount of complication your foreclosure process sees depends greatly on how you approach it and how you work towards communicating with all of the parties involved. Keep in mind that banks don’t like the foreclosure process any more than you do. While that may seem like a hollow sentiment, foreclosure is a negative against a lender’s history just as it is against your credit history.

If you simply throw up your hands and make it difficult for the bank to make any kind of arrangement, you can probably expect an arduous process that will not be pleasant. Your home will be taken and sold by the bank and your credit history will be harmed greatly. However, if you work at rectifying the situation and improving your monetary situation, you could certainly see relief and an updated payment plan to fit the new balance of your income level and loan amount.

To be clear, foreclosures are certainly not the best-case scenario for any homeowner and it is often an unpleasant experience that can greatly alter the financial future of the homeowner that undergoes it. However, it must also be made clear that the bank has as little desire to go through a foreclosure process as you do. It is there where many misconceptions can arise about the foreclosure process.

The best advice to make the foreclosure track as smooth as possible is to work closely with your bank or lending agency and keep the lines of communication open at all times. While there can be an urge to simply give up and let the process run its course, that will only elongate the difficulty and produce a more difficult foreclosure. Instead, working at what has made your finances so strained can ease and sometimes halt the foreclosure process altogether, certainly a benefit worth the effort.

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