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The Truth About Foreclosure Prevention

May 3, 2008
Foreclosure is the legal right of a mortgage holder or other third party lien holder to gain ownership of the property and/or the right to sell the property and use the proceeds to pay off the mortgage if the mortgage or lien is in default.

There are several types of foreclosure in the United States, but two are popularly used.

Foreclosure by judicial sale: It involves the sale of the mortgages property done under the supervision of a court, either the proceeds going first to satisfy the mortgage, and then to satisfy other lien holders, and finally to the mortgagor. However, all the parties must be notified of the foreclosure since it is a legal action.

Foreclosure by power of sale: It involves the sale of the property by the mortgage holder not through the supervision of a court. Foreclosure by the power sale is more expedient way of foreclosing on a property than foreclosure by judicial sale. Proceeds from the sale go first to the mortgage holder, then to other lien holders, and finally to the mortgagor.

Signs for foreclosure

Mortgage payment: If your mortgage payment is 15 days late, you may have to pay a late fee.

Default: A payment that is 30 days late may warrant a notice of default which will explain steps to be taken to prevent foreclosure.

Foreclosure: If your payment is 90 days late and there is no payment plan with the lender, the lender can initiate foreclosure or foreclose. This is usually followed with official notices and a court ruling resulting in public auction of your home to pay off the mortgage debt.

Foreclosure prevention: This is a program designed for homeowners who have defaulted on their mortgage and are in danger of foreclosure. In other words, foreclosure prevention is a counseling program that assists homeowners who are in trouble with their home loan. The program makes it possible for you to retain your home.

What are the merits?

The program helps you to work out a plan with your current lender.

It provides information that will enable you save for future repairs and other home expenses.

It helps you to get new refinancing loan.

It helps families stay in their homes and retain their equity.

It prevents widespread losses in low and moderate income homeowners.

Project Lifeline: This is anew program designed by the Bush administration to deal with a worsening housing slump facing homeowners about to loss their homes. For qualified homeowners, it will put the foreclosure process on hold for 30 days.

Project lifeline was put together by six of the nation's largest financial institutions. According to them, they will contact homeowners who are 90 or more days overdue on their monthly mortgage payments. While the foreclosure process will be put on hold for 30 days, to enable lenders try to work out a way to make the mortgage more affordable to the homeowner.

Homeowners who have declared bankruptcy or if they already have a foreclosure date within 30 days or if the home loan was taken out to cover an investment property will not be eligible for the program.
About the Author
Clement Idahosa is a writer.visit my blog for information. http://home-mortgagebuy.blogspot.com
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