Two Misconceptions about Foreclosure

Avoiding Foreclosure

Foreclosure is scary and confusing, and when you are unprepared to deal with it, unbelievable pressure can mount. Many people have misconceptions about foreclosure. Here we deal with two.

1) Foreclosure will Remove Your Debt

Avoiding Foreclosure in Houston Tx   Misconception 1

The first misconception is that foreclosure will remove your debt.Many consumers think that after a foreclosure they will not owe anything more to their lender. They are then surprised that even though they no longer own the bank informs them they still owe them money. Most mortgage lenders require a personal guarantee for the amount of the note. They have two avenues available to collect their dues. Taking back the house is the obvious one, but they can also still sue the borrower, especially if the amount recovered from the sale of the house (which is usually the case) does not cover the principal, interest, and fees. In a foreclosure, if the bank sells your house but is not able to recover the full amount due to them, if your state allows lenders to collect deficiency judgments, you’re still on the hook. State laws vary. In Texas you are typically given credit for the fair market value of the home instead of the actual amount the bank recovers in the auction.

Of course, the best thing a home owner can do is avoid foreclosure altogether. Sometimes “stuff” happens, and you simply fall behind on your mortgage.  It happens a lot more than people think. If you have more questions about foreclosure and want to talk to someone who has helped others avoid foreclosure, fill out the form or call Heritage Home Buyers today at (281) 738-3898.

2) The Bank Wants Your Home

Avoiding Foreclosure in Houston Tx   Misconception 2

The second misconception is that the bank wants your home. We have seen hundreds of foreclosures, and have yet to see a case where the bank actually wanted the property. Their business is lending money, not real estate. They do not make money by taking houses back. Foreclosure for them is a last resort, just like foreclosure is a last resort for you. The sooner this issue is addressed, the better you and your family will be. Fill out the form, or call Heritage Home Buyers today at (281) 738-3898.

The common person does not understand the complex world of the banking industry and the various rules affecting its practices from state to state. On top of that, each state has its own rules and regulations which have various pitfalls and protections for the home owner. Simple logic leads to an initial conclusion that taking possession of the house is beneficial to the bank. But those who take that notion should no that actually the bank does not want the house. The bank wants their monthly payment. It’s reasonable to believe since the bank can indeed take possession and sell the house that they would take every opportunity they can to do that. However, since they are in the money business instead of real estate, and they have to live under all those rules protecting consumers, the truth is the banks do not want your house. Many times, they are actually more flexible than home owners think. They are set up to make money by lending to people. Banks are not set up to be real estate agents or investors. They prefer to avoid foreclosure too. They want the interest payments, and many times settle for less, but the clock continues to tick.  Eventually, they will get their due. So when people miss their payments as agreed, the banks have no choice but to repossess the house, hoping to cut their losses. Do not ever think that the bank is out to get your house. In reality, they want to keep you in your house as much as you want to stay in it.

Again, time is not your friend when facing foreclosure. The sooner this issue is addressed, the better you and your family will be. Fill out the form, or call Heritage Home Buyers today at (281) 738-3898.

Checkout these Heritage Home Buyers Foreclosure Resources:

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Video Script:

Misconception 1: The first misconception is that foreclosure will remove your debt. Often, your debt is larger than you think. There may be back taxes, penalties on paying late, clauses in the contract which may have financial implications, and then any second lien you may have which will not be satisfied if the first lien holder is the one foreclosing on you. The sooner this issue is addressed, the better you and your family will be. Fill out the form, or call Heritage Home Buyers today at (281) 738-3898.

Misconception 2: The second misconception is that the bank wants your home. We have seen hundreds of foreclosures, and have yet to see a case where the bank actually wanted the property. Their business is lending money, not real estate. They do not make money by taking houses back. Foreclosure for them is a last resort, just like foreclosure is a last resort for you. The sooner this issue is addressed, the better you and your family will be. Fill out the form, or call Heritage Home Buyers today at (281) 738-3898.

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