What You Have To Know About Foreclosures

What You Have To Know About Foreclosures Foreclosure is the act of repossession of a piece of property at the hands of the financial institution – or owner of the initial home loan and/or mortgage. In the event that a borrower finds themselves to be in a state of financially insolubility – and as a result – unable to satisfy the fulfillment of the initial home loan, their property can be taken from them in order to satisfy the outstanding debt to the fullest extent. Although – in certain instances – foreclosure can reveal itself as the most salient option with regard to repayment of a home loan or mortgage, the ramifications of foreclosure can sully an individual’s financial standing.

Foreclosure Assessment

Prior to the decision to foreclose property, an individual will be required to present similar information as was requested upon the application for the initial mortgage. Then individual will be required to present the following information:

• A valuation of the individual’s home will be required, which entails a full inspection of the property, as well as an evaluation by an appraiser. The results rendered from this process will dictate the value parameters of the remortgage loan rate in addition to any equity that is in the possession of the individual.

• A Full report of an individual’s financial state of affairs, which includes household income, debt, the current standing of the existing mortgage or home loan, expenditures, and all other financial restitution involving that individual.

• An agreement to accept additional penalties and fees that might accompany a foreclosure; these fees and penalties can include any foreclosing costs, appraisal fees, home evaluation fees, processing fees, and any supplemental fees instituted by the lender.

Ramifications of a Foreclosure

In the event that foreclosure cannot be avoided, an individual will be responsible for both any outstanding debts incurred as a result of the initial mortgage and/or home loan, but also any subsequent financial ramifications incurred by the foreclosure.

Although there exist circumstances in which foreclosure might reveal itself as the most viable option for the borrower, the individual should be prepared for the following possibilities as a result of foreclosure:

• The inability to receive future loans

• The degradation of an individual’s credit score, ranking, and/or line of credit

• The liquidation of additional assets in order to satisfy any outstanding loans, fees, and costs

• The inability to own or buy property in the future

• A record of the foreclosure on an individual’s financial records

• The possibility of filing for bankruptcy and/or undergoing repossession

Legality of Foreclosure

The parameters and protocols surrounding both the determination and procedure of foreclosure vary on an individual basis and in conjunction with the borrower’s respective state of affairs, outstanding debt, and current financial state of the home or mortgage loan in question; participation in all foreclosure assessment should be completed to the fullest extent - in a meticulous fashion. In the event that an individual experiences difficulty understanding the circumstances of foreclosure, or the options afforded to them during a potential foreclose, they are encouraged to consult an attorney specializing in real estate, property, finance, debt, collections, and contracts.

Related Topics