There are many myths about home foreclosures. Those myths are from the lack of understanding the process of foreclosure, foreclosure laws. Those myths cause fears, emotion. They also cause homeowners not to take action to stop home foreclosures.  Here, I only list top three of them that hurt home owner most.

Myth 1: Lender wants to take your home back. 

Almost every borrower will receive a letter or more than letters from the lender or lender’s representative or lawyer threatening to homeowner not to stay if a borrower fails to pay the mortgage payments consecutively for more than three months.Those letters are mostly written by lenders’ attorneys. The language or words used in those letters are usually rusty and threaten. But they are basically saying the same thing. That is, if you don’t pay, you cannot stay.This sounds like that lender wants to take back your home. Most borrowers thought that was what lenders really want. This is far away from the truth.
The truth is:Ninety percent of the instructional lenders almost never want your home. What they really want is for you to pay their money back with interest. In fact, instructional lenders usually hate going through the foreclosure process. Actually, there are several reasons why lenders hate to take your home back.1. Lenders are not in the business of real estate. Their business is to loan you money and make money on the interest.2. The foreclosure process cost a lot of money. Lenders have to pay legal fee, real estate agent fee, property taxes, property management fee, and repair costs, and many other costs.3. A lot of the time, the properties taken back by lenders were damaged, or trashed and  either by borrowers or other people. Those cost lenders a lot of money to repair. 4. Lenders also loss money for not getting interest payments.5. Lenders also have to pay the interest payments to wholesale lenders whom they borrowed money from. 6. Each property taken back by lender will increase the number of bad debts in their portfolio, which will decrease their ability to borrow more money. Lenders  make money by borrowing money from  wholesale lenders and then loaning  the money to  home buyers. That is why lenders hate to do the foreclosure and hate to take your home back. Lenders actually will bend over backwards to work with homeowners in avoiding a foreclosure. Often the lender’s flexibility still doesn’t go far enough in stopping the home foreclosure. So, never confuse that with the lender “wanting” your house.  What they really want by sending those rusty letters to you is to get you to pay for the mortgage payments. I will tell you the right way on how to deal with lenders and how to work with them in you advantages later. Myth 2: I have no job and no money and there is no way for me to stop the home foreclosure.Truth:Even though you have no money and no job, there are still several ways to stop foreclosure. You can turn the property back to the lender with “deed in lieu”; or you can ask lender to accept a discount sell the house to a buyer. In both ways, you will not have a foreclosure records in your credit history. Lenders will accept your request for deed in lieu or a short sale if you can approve that you don’t have any capacity to pay them. You can even ask them to forgive the “deficiency” or not to suit late you for the money you owned.You can also work with a investor to lower down  if you have a lot of equity in the home. If you are an elderly, check with the lender to see if a reverse mortgage is possible.

Myth 3. If I run away or hide, I have nothing to loss and lender cannot do anything to me. There is no consequence to me.Truth:No matter where you hide, lender still can go after you for the money you owe. Lenders can file deficiency judgment for the money you owed. Even though, lender don’t suit you for the deficiency, there are still several consequences to you:Foreclosure in your credit records will cost you a lot of money for the next coming ten years. Poor is expensive and poor credit score is also expensive. Poor credit score will not only make you to pay higher interest in your credit payments, but also make you harder to find a new job.

If you are facing foreclosure,  you should take actions to stop the foreclosure no matter what situations you are facing.  Please don’t give it up lightly.

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For more information about foreclosure, click following links:

Foreclosure timelines

Foreclosure laws

Free short sale listing

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