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Foreclosures – How to Stop Them

The financial world is very unstable right now. Everyone has heard the reports of the “credit crisis” and the melt down of the Stock Exchange, and many people have been left wondering if and how it will affect them. For some people, the current situation will have little effect, for others it will be life changing. In particular, many people working in certain industries such as banking or the automotive industries are losing their jobs, and will find it difficult to obtain regular employment again until the economy rebounds. If this happened to you, what would you do? What would your situation be? If you have a lot of money in savings, then it is possible that you could weather the storm, living perhaps on a partners or parents income for the time being. However, for many people this is not a possibility. Some people will lose their job and not be able to pay their bills and, worse, their mortgage. If you find yourself unable to pay your mortgage, this is a bad state of affairs that could end with you losing your home.

Foreclosure on Your Home

If you are unable to make repayments on your mortgage, this is a bad situation. If you stop making your repayments, you will likely have a very small amount of time before your lender contacts you with reminders and demands for the amount owing. If you are still unable to pay after these demands, that is when there is a danger of the bank foreclosing on your home. A foreclosure is when the bank takes ownership of your home and then sells it off to recoup the money that is owed to them. Foreclosure is the worst thing that can happen to a home owner. Even if a fire or some other disaster destroys a home, the land is still there to be rebuilt on. However, if the bank forecloses on your home you will lose everything – the house and the land, and you will be left with nothing.

How Can You Stop Foreclosure?

If you are that broke that you are unable to make even a partial payment, then you might find that there is little you can do to stop foreclosure. However, there are some tips that we can give you that can help you to get yourself out of the situation. The first thing that you need to do is to contact your bank and arrange a meeting with a representative. You should go in to the bank and explain your situation to the representative and see what they can do to help you. It is easy to think of the bank as a big, evil entity that does not want what is best for you. However, that is not the truth! If you ignore the bank’s requests and demands for the money owing then they will certainly put you out on the street. But you will probably find that if you take the time to go in and explain what you are going through, then the lender will do whatever they can to help you. Remember, they are people just like you and do not want you to be homeless! They might be able to refinance your loan, or offer you a consolidation loan to help you to get back on track.

What is a Consolidation Loan?

A consolidation loan is money that is lent to you for you to pay your debts with. That way, all of your debts are consolidated into one lump sum, and you will only have to deal with one lender. This is something that can solve your problems, although the consolidation loan will normally have quite a high interest rate and you will need to consider whether you will be able to pay back this loan. If you can not, then you will find yourself back in the same situation again. If you can afford it, this will give you some more time to come up with more money before payments start to become overdue again.

If you find yourself in financial trouble, you should start thinking of ways to fix it straight away. If you end up in a position where the bank is trying to foreclose on your home, then it might be too late to fix it. Talking to your bank is the best way for you to start, as this will be nothing new to them and they can give you some good ideas of what you can do to help your situation. If it comes down to you needing to take out a consolidation loan, or a second mortgage on your home in order to pay your debts, then that is something you will have to do. It might take you a while to bounce back, but that is much better than losing your home and ending up with nothing.