Property is among one of the most important assets one possesses. Built or bought over years of saving up and prospecting, losing its ownership can be one of the worst things that can happen to an individual, and that is exactly what happens in the process of foreclosure; join us today as we dive into the deep end and take a closer look at what exactly is foreclosure, how does it come about, how one can avoid getting their property foreclosed, and what a foreclosure defense attorney is, so without any further ado let us get started!
What exactly is foreclosure?
Foreclosure can be defined as the legal process wherein a financial institution or lender, through legal means, attempts to seize your property or house as a means of making up for a part of the debt which was given out initially.
Why does this happen?
Foreclosure happens because of non-payment of the debt and general lack of responsiveness, while lenders and financial institutions tend to persuade debtors to repay their money timely and to keep up with prescribed payments if the same is not done, their property which was set as a ‘collateral’ is taken over, to fulfill the payment of the debt.
What is a ‘Collateral’
Collateral is security against which a loan is doled out by financial institutions, for example – You are a borrower, you approach the bank for a loan to buy a new house, the bank checks your credit history and other financial details and decides you’re a fir candidate when confirming the loan the bank will add a collateral clause wherein you will have to agree to one of your assets being collateral, if you continuously fail to meet bank deadlines and are not able to pay, they will attempt to utilize the collateral clause and foreclose your house to make up for part of the debt.
How can I avoid getting my house foreclosed?
Foreclosure is an impending and unfortunate clause for those who don’t pay off their debts on time. To avoid foreclosure, you need to adopt a few simple steps
- Plan spending prudently – A lack of funds is why most people fall behind on their payments. This lack of funds usually comes from the fact that they’ve spent their funds recklessly to avoid falling prey to the same issue and plan and execute your spending prudently.
- Don’t fall behind on payments – It’s as simple as not falling behind on payments! Keep a financial reserve through which you can continue to pay the financial institution to avoid foreclosure.
- Assess your financial health before taking a loan – Take a deep look into your financials, understand your financial health and only then make a move to go for a loan or a new house.
- Keep a clear line of communication with the bank and understand their loan policy better –Always keep communications with the ban clear, be very clear about interest rates, payment plans, repayment periods, and moratoriums.
A foreclosure defense attorney is a type of lawyer who will help you in your foreclosure case. He will be your legal representative and will try his level best to help you not lose possession. If you do, he will attempt to minimize damage and get you the best possible deal out of the situation.
Foreclosures are the unfortunate circumstance which comes with non-payment of debts, its always important to be on top of your debts and to be always aware of your financial situation, which is why we advise on taking the big step of getting a house or taking a loan only after you’ve taken due cognizance of your financial situation.