There are many different ways to stop foreclosure, but there are also some unscrupulous lenders or individuals who might want to take advantage of you in a desperate situation. You shouldn't just be on the lookout for any loans to stop foreclosure, but you should also understand what makes up bad loans to stop foreclosure and steer clear of them. Since most people are in this process out of duress, it can be tough to negotiate new waters that are highly turbulent and emotional. However, it can mean the difference between saving your home and unwittingly giving it away to a total stranger. It pays to be informed and it pays to learn about bad loans to stop foreclosure.
The Quit Claim Deed
By far, the biggest scams involved the quit claim deed. This device passes ownership of your home to someone else. You may still be responsible to your lender for mortgage payments, but you no longer own the home. In addition, the person who requests a quit claim deed may tell you they need it so that the house can be refinanced using their own credit rating and that they will sell it back to you later, when you are up-to-date on your payments with the money they give you. Be very, very careful when you are asked to sign a lot of papers that you don't understand. One of them could end up being a quit claim deed and you might be being scammed. Always have your own lawyer go through any papers that you are signing in any legal transaction, especially one that involves as large an asset as your home. The quit claim deed isn't always an indication of bad loans to stop foreclosure, but it's a big red flag to get your papers checked by your own attorney to make sure everything is as the person says.
Other Signs of Bad Loans To Stop Foreclosure
Most people in the business to provide loans to stop foreclosure are not really credit repair agencies. If you hear that your credit will be repaired, this can be an indication that you are facing one of the many bad loans to stop foreclosure tricks. It's just a gimmick to get you to sign on the dotted line. It takes a lot of time to repair a credit rating that has taken a hit from foreclosure proceedings and a track record of current balances. Another indication of bad loans to stop foreclosure is when a third party agrees to negotiate with the lender and make payments to them on your behalf. Often, you think you've negotiated a lower payment, which you send to the middle man, and they pocket it and never send it on to the lender. Then, your house is foreclosed on and you've lost what little money you could have used to start a new life.
The first place one should look for loans to avoid foreclosure is with your current lender. The reason for this is that they have the most to lose if you end up defaulting on your loan, so they have the most to gain to help you find loans to avoid foreclosure. Banks and lenders have numerous strategies to help their lenders stay current on their loans, but they need to be informed when you are getting into trouble. They may not know that you've lost a job or are having a medical emergency, even if they try to contact you. The problem is that many homeowners are so frightened to even admit they might be headed for foreclosure that they tend to hide from the lender right when they should be picking up the phone.
It's Not A Secret
Once the notice of default is filed, your foreclosure will no longer be a secret. You can expect every con artist and legitimate investor to come knocking at your door with different options for loans to avoid foreclosure. However, how are you going to be able to tell who is genuine and who is not? The best way to do that is to call your lender and work with them to find loans to avoid foreclosure. It may turn out you are not in as big a trouble as the investors and scam artists are trying to claim you are in. It may be your mortgage lender or banker can resolve the issue simply by allowing you to skip a couple of payments and tacking them onto the end of the loan. Even if they can't resolve it with an easy fix, they may be able to direct you to other lenders who might be willing to fund a bailout of your foreclosure issue.
Second Mortgage or Home Equity Lines of Credit
Be careful getting second mortgages and home equity lines of credits. These may seem like permanent fixes, but defaulting on them can also put your house at risk. So, they can buy you some time, but if you expect to be out of a job for long or too overwhelmed with medical bills to pay off the loans to avoid foreclosure, then you need to be really proactive and sell the house, whether for a good price or at a short sale. In a short sale, the lender agrees to take a little less than what you owe, but you avoid damaging your credit rating. Good loans to avoid foreclosure shouldn't just bring you current, but should also help you avoid dents in your credit rating later.
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