Troubled homeowners start thinking about stop foreclosure and loan modification when they are at the last stage where they have no more funds to repay the loan to the bank. Although the problem was quite expected, yet homeowners tend to ignore it at the earliest stage, instead of taking precautions and end up in an embarrassing situation.
Homeowners despise the conditions under which they have to live without a home. The home or the place they have developed as part of their savings, perhaps the only savings is lost. At the end, the only option left is to stop foreclosure by seeking loan modification. Although loan modification is the only way out to stop foreclosure, it may not be a completely favourable position for the homeowner.
The bank, which is already upset with the homeowners’ bad credit and poor loan repayments, may put additional restrictions in the loan modification process. Despite all negotiations, the bank would think of many different ways to overcharge the homeowner by way of giving more credit at a higher rate of interest. The bank generally waives off any previous late payment charges charged to the homeowner, but new loans could possibly create new forms of payment, extending the duration of the period. Such a situation is likely to create lots of tension for the homeowner even in the later time.
There are ways to escape all the humiliation caused due to the foreclosure process. Even if the bank offers the loan modification, it may not be up to the expectations of the homeowner and he ends up paying more and more interest. In the first place, it is always advisable for a homeowner who has mortgaged his property against the loan taken to keep monitoring his expenses during the whole period of the loan duration.
Often, homeowners ignore keeping track of their expenditure. This is bad financial planning. It is better to keep an account of all the personal expenses. This practice helps people to prevent unnecessary expenses and can also lead to some savings. If there is a prior plan to make savings at the beginning part of the period, the homeowner can have more savings.
If the homeowner feels that he may not be able to make loan repayments in the future, he quickly needs to sit down and do some rethinking. It is always better to seek help during the foreclosure rather than just remain back, hoping that there will be other ways to work out. People who are in desperate situations of foreclosure often avoid sharing their problems with their parents, relatives and friends.
They either feel embarrassed or too proud to share such problems. However, such embarrassment increases when the bank finally announces foreclosure. So, it is better to share the problem and seek help from the near and dear ones while facing foreclosure. It is also important to inform the bank in advance if there is any doubt with loan repayments. The banks considers such situations and can offer a way out.