Last Minute Foreclosure Deal on Tri-Cities Washington Real Estate
While the prospect of losing a home to foreclosure is never an attractive one, some homeowners give up on the cause of their own property before it should really be time to call it quits. There is one last step, though it involves the dreaded word foreclosure, which can sometimes act as a final effort for those looking to avoid the reclamation of their property. While it is certainly not applicable in all cases, it is something to consider should the discussion ever turn to foreclosure.
A foreclosure loan in some cases is the answer and while the perception might be that the bank is all too happy to foreclose on your property, which is not the case. A foreclosure involves a lot of legal work that adds to the cost of giving you the loan in the first place, making the hassle something many banks try actively to avoid. You may be surprised how willing your own bank or others might be to assist you when it comes down to the prospect of foreclosure.
The Basics of a Foreclosure Loan
There are lending agencies out there that look specifically for those homes in distress so that they can offer something called a foreclosure loan. Basically, a lending agency enters your situation to purchase the loan agreement you have made with your original bank. In fact, there are times when your original bank will simply offer a foreclosure loan as a way of getting around the middleman and keeping you as a paying customer. While this may seem like simply shuffling around the debt, there are substantial benefits for consumers having trouble making payments.
Because your new lending agency is well aware that the original terms of your loan have not been working for you, hence the foreclosure threat, they will refinance the remaining portion of your loan in more favorable terms. One scenario that often plays out is the new lending agency lengthens the term of your insurance policy while lowering your monthly payments. While you may bristle at the thought of having to pay longer, getting monthly payments down to a manageable level is often the mechanism that makes these deals work for consumers.
Why Would a Bank Do This?
As stated above, the process of going through a foreclosure is a mess of legal and regulatory issues that take time away from other pursuits for the lending agency. From your original bank’s point of view, selling your loan at a discount to another agency helps them avoid all of that hassle while still seeing payment on your loan. No bank relishes the thought of uprooting a family, so the foreclosure loan can often get them out of that situation in a beneficial way.
For your new lending agency, the motivation is to get a paying customer a loan that they will probably get at a discount from the original institution. Though they have to be more flexible on payment plans and take on more risk (as you have already been near foreclosure once), the benefits of having a steady stream of income on a payment structure more favorable to the homeowner are more than enough, especially when that loan can be bought at a discount (as they often are).
So, as your financial situation begins to look dire and foreclosure looks imminent, explore the possibility of a foreclosure loan to not only get you out of a negative situation but also put you in a better position to pay off your mortgage each month through reduced payments. These types of deals benefit all involved and help you and your family hold on to your home.