Separating the Facts from the Myths on Foreclosures is a Really Good Idea

Debunking the myths on foreclosures and separating the facts is a really good idea because it can actually save you money and a lot of headaches. It is no myth that there are many unscrupulous companies offering foreclosure counseling or promising to stop foreclosure, all at a considerable cost to you.

They are unscrupulous because the information that they provide is free, as is the counseling that they offer. All you have to do is a little bit of research, and then contact one of the many non-profit and governmental organizations that actually offer foreclosure information and counseling free of charge. That gets rid of the myth that you have to pay for really good foreclosure information and counseling because the information is all the same.

Another fact that homeowners need to get straight is that lenders do not really want to come in and foreclose on a property because foreclosure is time consuming and costly. What lenders want is for you to repay the money that you borrowed and promised to pay back. The myth that lenders want to take over a property and resell it to make a further profit is simply not the case.

There is another myth that lenders will talk to third parties about a foreclosure so it makes no sense to visit a foreclosure counselor, and that is far from the truth. When you go and visit a foreclosure counselor, you will sign a written agreement which authorizes the counselor to speak to the lender, and lenders have staff specifically designated to speak to mortgage counselors.

There is another fact that an owner facing foreclosure needs to keep in mind, which is that foreclosure counseling should not be put off as a last resort. Foreclosure counseling is actually the smart thing to do when you are facing foreclosure, and it does not show that your finances are out of control.

It is a myth that you should only use counseling as a last resort, and that is actually the worst thing that you can possibly do. The longer you put things off, the longer you wait, the harder it is going to be to get positive results from an already alarming situation.

There is also the myth that lenders will not refinance your home if you are in foreclosure, which is absolutely not true. The truth in this instance is that no one will refinance your loan if you do not have equity in the home. On the other hand, if you have about 60% to 70% equity in the home, then there are lenders who specialize in this type of financing so that you can pay off your mortgage and stop foreclosure proceedings.

By the way, Chapter 7 bankruptcy will only put off foreclosure rather than stop it, and you will eventually have to come up with another solution to the problem in order to keep your home. And if you are dreaming up all kinds of innovative schemes to implement after Chapter 7, you have to remember that banks have procedures in place that are part of the greater bureaucracy, and your innovative idea is not likely to get any consideration.

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