Saving and Keeping Your Property from Foreclosure

By: Rokai Kolam


An agreement that grants a legal claim on real and personal property, or transfer of ownership of such property, to be used as security for the payment a loan is called a mortgage. The agreement is between a borrower or a mortgagor and a lender or mortgagee. Realty mortgages are on real properties. The document would include a statement of the incurred debt plus the description of the property that secures it.

Money obtained from a foreclosure sale is applied to paying off the recorded mortgages. Should the amount not be sufficient to cover the total debt, interest, and legal costs, the mortgagor can be sued by the unpaid mortgagee for the amount still owed. Any left over money however, goes to the mortgagor. There are two existing theories as to the ownership of properties on mortgage. The title theory conveys actual ownership of the mortgaged property to the lender but contains a provision that such conveyance is void when repayment is made according to agreement. The lien theory provides that the mortgagor retains ownership of the property with the mortgagee having a lien or legal claim against it when the debt is not paid. Of these two, the latter is more prevalently used.

Borrowers who intend to avail of mortgage loans should be aware of various details such as closing fees, points and annual percentage rates. These and other fees would ultimately affect the borrower’s capability to make good on his promise to pay his debt on time. The borrower’s failure to pay often leads to foreclosure which is the sales process undertaken by the lender to recover the funds owed by the borrower.

Foreclosure is a very painful process for any homeowner. No one wants the property he has worked so hard for to be lost due to missed payments. There are actually ways to avoid foreclosure although the best option can be chosen through the assistance of mortgage solutions providers.

Solutions come in various forms such as loan modification, forbearance agreement, foreclosure refinance, short sale, Chapter 13 Bankruptcy, partial claim, special forbearance and a deed-in-lieu. Loan modification can either come as a balance reduction or lowered interest rates. This program requires specific parameters that should be strictly followed by the person/persons it is granted to. Forbearance are offered to persons who experience loss of income or increase in living expenses but are able to correct their delinquency through their sufficient monthly income.

A mortgage refinance replaces the defaulted mortgage with a new one while consolidating all debts. A short sale would have the debtors selling the mortgaged property for less than the outstanding loan balance to pay the lender in full. Chapter 13 Bankruptcy is a court approved repayment plan that allows for payments according to what the debtor can afford. Partial claim places the past due amounts as a subordinate mortgage which will be paid when the original mortgage is paid off. Special forbearance usually spreads the repayment over a longer period of time while a deed-in-lieu lets the borrower deed his property back to the lender so that foreclosure can be avoided.

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There is one voice of reason that resonates when your bank refuses to listen - that of Manhattan Mitigation. It is a company that is truly dedicated in helping you save your property and ending your hardship. Company representatives can ably assist you in all solutions mentioned above.

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