Avoid Foreclosure Littleton: What is Forbearance?

When trying to avoid foreclosure Littleton, there’s quite a lot you have to learn along the way. Whether it’s the tricks you can use to avoid foreclosure, the rights every homeowner has with respect to foreclosure or the new terms you may come across along the way – there’s simply so much at stake here.

Once you have been served with a foreclosure notice, you cannot afford to relax. It means that there’s something wrong with your mortgage payments and you need to take care of the problem, otherwise, you and your family will become homeless.

Besides you and your family having nowhere to live, there are other implications of foreclosure. If your house happens to go through the foreclosure process – successfully – this will always reflect on your credit report, at least for the next seven years. It gets even worse to know that even after the said three years, you may still be forced to make formal requests – in writing – to credit agencies so that the foreclosure may be removed from your credit record.

Not so long ago, having a foreclosure on your credit report meant that it was almost impossible to secure another loan or line of credit. This was even tougher during the first two to three years of being getting the black mark on your credit report. In addition to denying access to loans and other credit services, having a foreclosure on your credit report also meant that rental property owners would find it hard to trust you with payment of the house rent, which also meant that securing a place to live after you’ve already lost your house was a major problem.

The good side of the story is that things have changed a lot in the recent years, where lenders can easily extend loan and credit offers even if you have a foreclosure on your credit record. You’ll enjoy learning that this can even work during the first two years after foreclosure, which should help you get back a new house, at least one that you can afford to pay and avoid any form of foreclosure notices.

But what is forbearance?

Rather than have to gamble on the chances of your lender granting you access to their credit services after the first two years of foreclosure, the best way to deal with this is to completely try and avoid foreclosure Littleton.

There are different reasons homeowners find themselves in a situation where they have to fight foreclosure. If your situation is as a result of sudden or rather unexpected financial issues that you are confident will not last long, you can qualify for a forbearance. This is, basically, where your lender may consider making things a little easier for you due to your current financial crisis. For instance, they can reduce the monthly mortgage payments for a period that you think will be enough for you to get back on your feet or even completely suspend the mortgage payments for the same period in order to give you time to recover.

If you have a huge medical bill to offset, for instance, you can talk to your lender and let them know your situation as well as your willingness to explore the possibility of forbearance. If your lender chooses to slightly reduce your monthly payments, you should be in a position to provide proof that you will indeed be able to make these reduced payments as expected. On the other hand, you should also be sure that you will be able to live up to your agreement or resuming payments once you are back on your feet if your lender decides to suspend the payments.

Forbearance will only help you avoid foreclosure Littleton for some time, but it won’t take the problem away permanently. In short, this is the same thing you get with bankruptcy, where you simply get more time to work out on a better solution that will eventually stop the foreclosure process. If you don’t work out a solution by the agreed time, your lender will still come for you and proceed with the foreclosure process.

In short, your forbearance won’t be unlimited. For a permanent solution to foreclosure, selling your house and using the money to clear the balance is a better option because, after all, that’s what the bank will do in order to recover the money you still owe them.