Common Myths About Foreclosure

There are certain myths associated with foreclosures that put homeowners on the wrong track. Being informed about the true facts of foreclosure can not only help you plan your moves if served with a foreclosure notice, but even help you to not let that stage come at all.

Myth: The bank wants to confiscate my house

All that the bank wants and is interested in - is its money; and would love to let you have the house once you have settled all the arrears due to the bank. After all, why would it like to go through the painful ordeal of dealing with legal hassles involved in a time-consuming procedure such as "foreclosures"? During a foreclosure, banks and mortgage companies suffer a loss of about $58,000, which is a lot of money to lose. They are in the money lending business and owning or selling homes is that last thing they would like to do.

Myth: Foreclosures are not so common

There is hardly anybody who does not dread a foreclosure and number of people have actually faced a foreclosure. However, with the right tools and resources, stopping a foreclosure need not be an impossible task. You are not alone, so face the challenge and if need be consult a real estate expert who can advise you about the many options to avert a foreclosure.

Myth: Just one missed payment cannot do much harm

When you miss a payment, you actually owe the mortgage company two payments: missed payment + the current month's payment. So, being one month behind on payments implies you owe two monthly payments to the creditors.

Myth: I need to start packing soon after receiving a foreclosure notice

Don't panic! Many states follow a very long foreclosure process, and you may actually have several months to find a new house before you are asked to move.

Myth: There is nothing I can do to get my house back

You would be surprised to know the number of ways in which you can fight a foreclosure. Homeowners usually have "redemption" rights by virtue of which you can settle the mortgage debt in a limited time period.

Myth: All my belongings will also be gone with the house

While you have no right over the permanent attachments to the house, you are allowed to carry your personal property with you.

Myth: I owe the bank nothing once it takes away my house

The truth is if there is deficiency, you still need to pay the bank the difference and interest on that amount.

Myth: There's no way to stop a foreclosure

You have plenty of options to stop an oncoming foreclosure than you might have imagined. Get in touch with an expert mortgage negotiation professional who can help you avoid it by working out better repayment plans with your creditors or getting the loan amount reduced. If negotiation does not work for you, you may consider refinancing to settle arrears. Mortgage negotiation professionals can also inform you about ways to procrastinate a foreclosure to give you more time to explore different options.