1. Are You Facing Foreclosure?

Life is constantly changing and it may seem as if we are on top of the world one moment and then the next moment, we are just struggling to get by. As a result of the recent financial crisis and the changes in the housing market, many families have found themselves in difficult times. In fact, there are many individuals that are facing a problem with foreclosure and the fact that they need to leave their home. This publication is to help those individuals to recognize that they have options, including the possibility of planned foreclosure and walking away with money in their pocket.

Many people that consider the possibility of planned foreclosure think that they are hurting themselves, or perhaps hurting the bank as a result of their decision. In reality, however, foreclosure is just a matter of doing business for financial institutions and in the right market; it can actually be beneficial for them. That is why many lending institutions will aggressively seek a foreclosure rather than helping you to look at your options and seeing what they can do to allow you to stay within your home. After all, if they can sell the home at a profit, they win and their investors win.

In fact, we are going to take a close look at what happens during a foreclosure and see if anybody loses during this time. If it is done properly, it may actually benefit you and your family. At other times, however, there may just be no other options. But if you follow the course that is outlined in this publication, you may find that you are taking away some of the sting that a foreclosure may cause.

Do you understand why we are in a housing crisis and why so many millions of families are facing a problem with foreclosure? If you're like most people, you simply consider it to be one of the ups and downs of the market. But the fact is that there are specific reasons why we are in this crisis and unless you are in a very narrow group of individuals, you are not at fault. You are simply a victim of circumstance, and we will discuss the reasons why those circumstances have arisen. By understanding more about the credit crisis and what has happened to housing in recent years, it can help you to feel better about your situation.

Would it surprise you to learn that there are benefits associated with foreclosure? Most people that find themselves in a financially difficult situation are only able to see the negative part of their circumstances and the possibility that a foreclosure is in front of them. If you look at it the right way, however, and plan now for the process, you may actually be able to walk away with your dignity and perhaps even a little bit of money in your pocket. We will discuss some of the potential benefits of foreclosure, and what the entire situation can mean for you and your family.

One of the issues that are of concern to many people that are facing these types of circumstances is what is going to happen to their credit. It certainly is a good idea for you to maintain your credit score when possible, and that is even true when you're facing the possibility of a foreclosure. There are going to be problems with your credit, but if you handle things properly and take the necessary steps, you may find that you are able to recover very quickly and perhaps even get into a new home again within a year or two.

Is it possible to avoid foreclosure? Yes, but it is not always desirable to do so. It is a good idea for you to look at your options, however, and to see what may be possible so that you can avoid foreclosure and perhaps even stay in your home. At times, those options can even be exercised right up until the point when the foreclosure proceedings are about to take place. We will take a look at some of the more common opportunities that may be in front of you to avoid foreclosure and to actually be able to afford your home again.

More than likely, you are wondering how long it is going to take for the foreclosure to fully take its course. That is a question that is common, but it is one that differs from one area to the next. We will take a look at some of the circumstances that may surround the foreclosure process and discuss how long it is going to take, depending upon where you live. At times, you may be surprised to learn that you can stay in your home for an extended time, even once you stop making the payments.

If you decide to go through with the planned foreclosure process, you will likely be offered some money at some point or another, in a program that is known as cash for keys. This is something that the bank will do in order to save themselves the money and the time that is associated with foreclosure. The amount of money that is offered in this type of program may differ from one lending institution to another, but it is not uncommon for them to offer you well over $1000 in order to leave your home. Of course, you are basically signing over the home to them at that point, but it may be an option that you want to consider.

Do you have some type of an exit plan in place? This is one of the most important things to consider, ensuring that everything is covered in the event that the foreclosure goes through. In some states, the foreclosure may actually put you out of your home unexpectedly, even if you are seeing it coming for quite some time. In other states, you will be notified about the fact that the foreclosure is taking place and you will be given a set amount of time to vacate the home.

Once you leave the home, you need to make sure that you and your family have a place to live. There are actually options available, although those options may be somewhat limited because of the changes to your credit score. We will talk about some of the possibilities that you may want to consider and how you can get back on your feet again, even if you're dealing with temporary circumstances in the meantime.

One of the benefits of a preplanned foreclosure is that you may be able to save some money during the time that the foreclosure proceedings are taking place. Unless you experience a complete financial reversal, you will likely be making some additional money on top of your regular living expenses, less the mortgage that you are no longer paying. If you continue to work hard during this time and have a plan in place, you may find that you are able to save a considerable amount of money that can be used as a down payment on a different home, or perhaps to put you in a better circumstance, once you are finally asked to leave.

Although the primary mortgage is something that needs to be concerned about, there are also other potential loans that could be associated with the foreclosure. When the mortgage company files for foreclosure, they are going to notify everyone else that has an interest in the property. Those companies may include a second mortgage, or perhaps a homeowners association that is associated with your neighborhood. You want to make sure that you have these bases covered as well, because an HOA can often push a foreclosure through very quickly in comparison with a bank.

Finally, we are going to talk about the possibility that you may need to get some legal help to assist you through this difficult time. There is a lot of stress that is associated with going through foreclosure, and it can be difficult on everyone in the family. When you have the proper legal help by your side, it can take some of the strain off of the family by allowing them to do the necessary paperwork and field any questions that may be associated with the foreclosure process. It is typically much less expensive to have legal assistance during this time than to pay the mortgage.

Although the process of going through foreclosure is unpleasant, there can be a silver lining that is associated with it as well. When you plan for the foreclosure and take the necessary steps, you may find that you are coming out of it in a better situation than what you were in before the foreclosure took place. It may take some time, but if you are able to keep a cool head and plan carefully during this time, you will find that everyone benefits as a result.

2. A Look behind the Housing Crisis

Although it seems like just a few days ago to many of us, there have actually been quite a few years that have passed since the start of the mortgage crisis that began in 2007 in the United States. This crisis has had a rippling effect, with many individuals losing their homes quickly, while many others continued to lose their homes as the years passed. This is not only due to the type of lending that took place during that time, it is also associated with the effect that the mortgage crisis had on the overall economy as well.

Although most people are aware of the mortgage crisis and the effects that it had on the population in general, they may not be fully aware of why it took place. In this chapter, we are going to take a look at some of the factors behind the mortgage crisis and what it means for you. Although we will discuss it in greater detail, the basic problems that led up to this issue included fraud in the housing market and mortgages, and greed on the part of many individuals and corporations.

For well over a century, it has been the "American dream" to have a home and to own it outright. Homeownership was considered to be an asset by many individuals, and it is something that most families strived for because it provided a degree of stability and comfort. Those factors, however, were nothing more than a smokescreen because mortgages have always been on shaky ground and homeownership has always been just one moment away from being taken out from underneath you.

In the years that lead up to the mortgage crisis, everything seemed to be favorable for purchasing a home. In fact, the interest rates were dropping during that time, and it seemed as if everybody was able to get a mortgage, regardless of whom they were. When you look behind the scenes, however, it had a lot to do with the companies that were associated with lending the money to families that wanted to have a mortgage. Basically, Wall Street got involved and it seemed as if it was like shooting fish in a barrel because all they had to do was lend money to anyone that wanted it, and they could line their pockets with the cash that was flowing in their direction.

Individuals who were in the business of writing mortgages also got caught up in the greed and frenzy of the times. There were representatives of the lending institutions that were behind the banks that were coming in on almost a weekly basis, changing the terms of what was necessary in order to receive a mortgage. At its height, and right before it finally crashed, you could basically get a mortgage by going in and signing a piece of paper. These types of loans did not require any credit to be pulled, and there was not a lot of documentation that was involved with it. In essence, they were saying that anybody could come in and get a loan, simply because it was financially profitable to those that were lending the money.

There were also a lot of lending practices during the time that have since been redefined as predatory lending, and which are now illegal and highly prosecuted, if they are found to exist. One of the types of loans that were popular during that time was one that charged 0% interest for a set amount of time. But then the mortgage price would balloon to the full interest rate. For the first several years, the people were in their homes on these types of loans were loving life because they were able to afford their mortgage easily. As soon as it ballooned, however, they found that they were in over their head.

The easy money that was associated with mortgages did not only affect those who were purchasing a home for the first time. During the time that led up to the mortgage crisis, the prices of homes in many areas went up so quickly that additional equity was available on your property within a matter of months. People who had their home for many years decided that they would take advantage of this new type of lending and took out a second mortgage, or perhaps renewed their first mortgage under such predatory lending practices. Those individuals also lost out when the mortgage interest ballooned.

It seems as if the mortgage crisis began to develop overnight, with housing prices going stagnant very quickly, and individuals who had balloon mortgages finding that they were no longer able to afford their home. As the interest rate increased, those who were on an adjustable rate mortgage found out that it was difficult for them to afford their home as well. When all of this occurred, many families found themselves in a very difficult situation. There were no longer able to afford the home where they lived, and at best, they were on slippery ground.

When families started to fail to be able to keep up with their mortgage payments during this time, it brought about the bank crisis, and some banks began to fail as a result of problems. Since people were no longer able to pay their mortgage, it really put the entire economy into a death grip. As a result, many other families that were still able to stay in their home and who tried to do their best to avoid any type of additional mortgage were also in a difficult situation because they were losing their jobs. It simply snowballed from that point and for quite some time, both the public and financial institutions were in a panic.

After the initial effect of the mortgage crisis occurred, home values began to drop rapidly and in some cases, the homes were only worth a fraction of what had been lent through those predatory lending practices. The money had already been spent, however, so it was lost to the financial institutions. The only option that they had available was to try to dump the homes as quickly as possible. It resulted in a lot of homes sitting vacant and going to waste, rather than being put to good use.

Today, we are still feeling the effects of the mortgage crisis, but times are different. Housing prices have begun to recover in some areas, although they are not up to the high points that were seen in the early 2000's. Today, it is possible for a foreclosure to take place and for the bank to recover their money, rather than simply allowing the home to stay vacant, and losing both the home and the money that was lent. That is really the difference and why you may be able to go through a preplanned foreclosure with a clear conscience, because the bank will recover their money and more.

3. Are There Any Benefits to Foreclosure?

When most people think about the possibility of going through foreclosure, they only envision the stress and potential problems that are associated with it. To be certain, there are problems that may be attached to a foreclosure and we are not trying to hide those in this publication. What we are trying to do, however, is to let you know that going through a preplanned foreclosure and taking the proper steps during this time may actually benefit you and your family in the long run.

In this chapter, we are going to take a look at some of the possible benefits that you may experience when you go through a foreclosure. It is not done to talk you into the possibility of taking this step, but it is done to show you that every cloud does have a silver lining. More than likely, you will experience some of these benefits for yourself, but you may also experience additional benefits that are specific to your circumstances. Continue to take advantage of all the benefits that are associated with this difficult issue, and you may find that you are able to maintain your dignity and your positive outlook during a time that would otherwise put you in a downward spiral.

Alternatives - One of the surprising options that may come out of a preplanned foreclosure is that you will find alternatives to the foreclosure process. That is why it is best for you to adopt an attitude of "hope for the best and plan for the worst" during this difficult time. When the bank sees that you have defaulted on your loan, they may offer you alternatives that are too good to ignore. Some of those alternatives are going to be discussed in another chapter of this publication and include the Making Homes Affordable modification programs. These types of incentives can help you to stay in your home, if you are close to being able to do so on a financial basis.

Budget - One of the reasons why many families are facing foreclosure is because they have failed to budget properly. They may have gotten in over their head, with the problem of a hefty mortgage, car loans and all of the other bills that are associated with living day-to-day life. When you find yourself in a situation where a foreclosure is a real possibility, it is likely that you will also find that you're able to budget more effectively. Being able to budget your money is a skill that will not only work well during this difficult time, but it will follow you throughout your entire life and work well, regardless of your circumstances.

Savings - Most families that have a financial reversal or find themselves in the situation where they are no longer able to afford their mortgage are not going to be completely underwater financially. They may not be able to afford the mortgage, but they can afford to live, and any extra money that they have available that would otherwise go to the mortgage can be put into a savings account. In fact, saving money is one of the primary benefits of going through a preplanned foreclosure, and it is one that you should consider as well.

Fresh Start - Unfortunately, many families are in dire straits, and if you are underwater as a result of your mortgage and are not able to afford it, it can be a real strain on your lifestyle. By going through a preplanned foreclosure, however, you have the opportunity to gain a fresh start and one that you can use in any direction that you want to use it. If you find that you are burdened as a result of your housing situation, walking away from it may be the best option available.

Less Stress – It may seem difficult to imagine that going through foreclosure is going to reduce the stress in your life. The fact of the matter is, however, you may find that you are reducing your stress significantly as a result of this type of plan. As long as everyone within your family is on board with your decision and you work together as a unit, you will find that the stress is reduced. That is normally true during the time that you are going through the foreclosure, but also when your circumstances change after the foreclosure takes place.

4. What Will Happen to Your Credit?

Although the foreclosure process is one that many individuals consider, there is a lot that goes on behind the scenes that should also be considered as well. One of the factors that you should look into carefully is how foreclosure is going to impact your credit, because that can impact your life in a number of different ways. Although there are going to be different circumstances for each individual, and in some cases you may already have credit problems, this chapter will attempt to look into what will honestly happen to your credit when a foreclosure takes place.

First of all, you should recognize that any problems that you have with making payments, including paying your mortgage, are going to show up on your credit report. From the time that you first default on your loan and go 30 days without making a loan payment, the credit agencies are going to be notified. This is going to hurt your credit from the very start, and more than likely, you're not going to be able to have any credit extended to you during the time that the foreclosure is taking place.

In addition, a foreclosure is going to stay on your credit record for many years, or perhaps even permanently. At one time, a foreclosure was a crippling blow to the credit report, but today the impact may be less than what it was in the previous time. In fact, you may even be able to get into another home within a few years after your foreclosure takes place. Typically, the lending institution is going to want a letter from you that explains why you went through the foreclosure, but they may be able to work with you to ensure that you can get the money that you need.

Some people will consider the possibility of filing for bankruptcy, thinking that this would help to ease the problem and to limit the impact on their credit score. In reality, however, bankruptcy is going to have very little to do with your mortgage and the effect that it has on your credit. In a bankruptcy judgment, any type of unsecured debt is going to be affected, such as credit card payments, but the debt that is secured, including car loans or mortgage loans are not going to be affected. Walking away from a mortgage and filing bankruptcy is not necessarily going to wipe the foreclosure off of your records.

You also need to consider the possibility that your credit has already taken a significant hit because of your financial reversal, which may have led to the difficulty that you had making your mortgage payments. Your credit has already been significantly lowered because of being in default on your mortgage, so foreclosure may not have as significant an impact as what you might think.

It is always a good idea for you to get professional advice when it comes to dealing with such a serious issue as your credit. There are individuals that can assist you, not only in minimizing the impact that a foreclosure may have on your credit, but in helping you to clean things up, once the foreclosure has been completed.

Above all, do what you can to clean up your credit and to get back on your feet, as quickly as possible after the foreclosure takes place. It may take a year or perhaps more, but paying your bills on time and keeping your payments at a minimum is going to have a positive impact on your credit. You may find that it is possible for you to have credit extended to you in a short amount of time, allowing you to get a credit card or perhaps a car loan. As you continue to work on your credit and time goes by, you may also find that it is eventually possible for you to get into a home again. It does take work, but the work will be well worth it in the long run.

5. Does Anyone Lose in This Scenario?

When you are facing a difficulty financially and the possibility of foreclosure is looming, you likely have some guilty feelings that are associated with it. After all, you entered into a contract with the bank and said that you would make payments on a regular basis, in order to pay off the mortgage over the course of time. By foreclosing on the property, you are going against that part of the contract, but not necessarily the entire contract. It is important for you to understand who loses, or more specifically, who doesn't lose in the case of a foreclosure.

First of all, it's important to recognize that most banks that are putting you through the foreclosure process do not actually own the mortgage. In many cases, it is agencies that are backed by the United States government, known as Fannie Mae and Freddie Mac. It may come as a surprise to you to learn that your mortgage, which may have been paid to a secondary company for years, is actually owned by one of those organizations. When you go through foreclosure, they are the ones that are going to end up owning the home.

It is also important to understand the actual information in the contract that you signed. You are stating that you are going to make payments and if you do not make the payments, they are going to take the home away from you. You are still sticking with that part of the contract, because they are going to take the home away from you due to the fact that you are not making your payments. Of course, it is all in how you interpret the contract, and it may be to your benefit to hire a lawyer to interpret it for you if you have any questions.

When the financial crisis first started and mortgages began to drop quickly, a home that ended up in foreclosure would likely remain on the market for an extended period of time. The banks did not have the ability to care for the home properly, so many of them simply went to waste and the bank lost a considerable amount of money, at least on paper. Of course, they were able to recoup some of the money in some way or another, but there were also a lot of bank failures as a result of the mortgage crisis.

Today, we're dealing with somewhat of a different situation because the housing market is actually beginning to turn positive again. Although it is nowhere near what it was in the early 2000's, many homes are gaining equity when at one time, they were underwater. If you find yourself in a situation where you are no longer able to afford your mortgage and are considering the possibility of foreclosure, it is unlikely that the bank is going to lose in this regard. Of course, if you have positive equity in the home, you may want to consider another option, such as selling the home and putting that equity in your pocket.

We are no longer in the middle of the mortgage crisis, but the effects that were seen as a result of it are still being felt down to this day. They are felt by those in the financial industry and they are also being felt by individual families who are homeowners and are having difficulty paying the mortgage. When you make the decision to go through with the foreclosure and to plan the process in advance, it is unlikely that anybody is going to lose in the end. You will lose your home, but if you plan your situation properly, you will still walk away with money in your pocket.

6. A Look at Your Options - Can You Avoid Foreclosure?

Foreclosure can be a very difficult situation, and although it is possible to plan things and to come out on the positive end of it, it is still going to be a stressful problem. As a result of looking at the possibility of foreclosure, many families have also looked into the possibility of keeping their home. Today, there are more options available for keeping your home than there were in times past. In this chapter, we are going to review some of those options that you may want to consider so that you can remain in your home for a little while longer.

First of all, it is important to recognize that walking away from your home is going to cause difficulties in some way or another. Planning a foreclosure can work to your advantage, but it is still going to affect your credit and it is also going to affect your stress levels, to say the least. Looking at some of the options that are available may be rather attractive when you compare it with the problems associated with foreclosure. Although this publication is primarily for those that want to walk away from their home, never overlook your options.

If you have not yet entered into default on your home, you may have the opportunity to get a type of mortgage that is known as a reverse mortgage. This type of mortgage is often misunderstood, and it is vitally important that you understand every aspect of it before you sign on the dotted line. If you get a reverse mortgage in order to keep your home, you may only be able to keep it for a temporary period of time. It is also possible that you may wind up in foreclosure again, so you will basically prolong the process.

Once you default on the loan or if you are in foreclosure, your options actually expand rather than getting tighter. In fact, you may have difficulty dealing with the financial institution that is holding the mortgage, before you are in a situation where foreclosure is eminent. After you begin with the foreclosure process, however, the bank will likely want to work with you in order to make sure that you continue to pay on the home and that they continue to receive money on it from you as the homeowner.

It is important to recognize, however, not every bank is going to want to work with you to the same extent. In some cases, your home may be rather attractive and the bank may feel as though they can make a profit by allowing you to go through with the foreclosure and then selling your home on the backend. There are also some financial institutions that are difficult to work with, and you may find yourself in a very bad situation in this regard. If you are dealing with a bank that is not willing to work with you and the foreclosure process is looming, get professional help. A lawyer may be able to assist you in working out your options and you would be surprised with how quickly they can make it happen.

One of the best options that you may want to consider is a loan modification. The bank that holds your mortgage is going to have the option of modifying your loan, provided you are able to meet certain requirements, and if it is going to be to their benefit as well. It may be to your benefit to modify your mortgage at this time, simply because interest rates are low and you can get a much more attractive price and monthly payment on your home.

The terms of the loan may also be adjusted during a modification, and any money that you may owe because of missing payments can be tacked on the end, or may be put into payments over a longer period of time. As long as you are able to meet the obligations of paying the loan, it is likely that the mortgage company is going to want to work with you.

The government also has a program known as the Making Homes Affordable Refinance Program (HARP). This may also be a refinance option that you want to consider because you can get in at a very low interest rate, and it can help you to maintain your home by having more affordable payments. In addition, working with this type of government program is not going to have an impact on your credit score, as would a foreclosure.

There may also be an option that is known as a forbearance, in which the mortgage company provides you with an option to go without paying your mortgage for an extended amount of time, in order to help you change your financial situation again. They may also offer you lower monthly payments, or perhaps have you pay the interest only or the principle only during that time. This type of forbearance program can allow you to catch up on your overall mortgage and may help you to avoid foreclosure. It also gives you the opportunity to resolve your delinquency, rather than simply walking away from it.

You may also have an option that is known as a deed in lieu of foreclosure. With this option, you are basically transferring the property back to the mortgage company, and they will sign papers that release you from both the loan and from the payments. This is perhaps one of the easiest ways for you to get out from underneath mortgage debt. They may even provide you with additional assistance, including money to help you relocate. Using this option may help you to see benefits quickly because you can begin working on your credit immediately. It also provides you with options to leaving the home, rather than coming home to a lockbox one day. Some mortgage companies may even give a release to the home, so that you can stay in it while you are looking for other arrangements.

As you can see, there are options available when it comes to getting out from underneath your mortgage. Regardless of whether you decide to stay in your home or not, however, you may also find the possibility of walking away from the home and doing a planned foreclosure to be attractive as well. It always helps to look at your options, so that you can recognize what is going to be best for you and your family.

7. How Long Will the Foreclosure Take?

When you make the decision to go through with the foreclosure process, one of the first questions that you are going to have is how long it takes to go through with the process. From the time that you default on your loan, the wheels of the emotional rollercoaster are going to start, which will eventually having you looking for another place to live because of the requirement to leave your current residence. The exact amount of time may differ, depending upon a number of factors that will be considered below.

Before we discuss the length of the foreclosure process, it is important to recognize that each case is going to be unique. That being said, the following information may be able to provide you with a general guideline, as to how long you can expect to be in your home once you go into default.

Notice of Default - One of the first steps in the foreclosure process is known as default. After you miss your first payment, you're going to receive a notice of default, and if you continue to miss payments, you will eventually be officially in default and the foreclosure process will begin. Typically, the notice of default is going to be issued approximately 30 days after you have missed four payments. Once the notice of default has been given, you will have up to three months to satisfy the delinquency, or the foreclosure process will proceed.

Nonjudicial or Judicial Foreclosure - Another consideration is if you are in a state that allows judicial foreclosure, or if you are in a state that allows nonjudicial foreclosures. They are similar to each other, but in the case of a nonjudicial foreclosure, the court is not necessarily going to need to get involved in order for the foreclosure to move forward. If it is a judicial foreclosure state, a lawsuit must be filed, and then there will be steps that need to be taken in order to prove the fact that you owe money and that you are in default. A nonjudicial foreclosure will typically move along fairly quickly, but a judicial foreclosure may take months or perhaps even years to go through.

Aggressiveness - There are differences between the mortgage companies, with some being very aggressive in pursuing foreclosures and others being somewhat relaxed. It really depends upon the aggressiveness of the law firm that was hired by the mortgage company, as to how quickly things will move along. In some cases, you can ask for an extension and it may take several months before any more paperwork is filed. It may also be possible that they file on the day that they are permitted to file, which will move things along much more quickly. There is not necessarily any rhyme or reason; it is just that some lawyers are more aggressive than others.

Redemption - There is a certain amount of time after the foreclosure is complete in which the homeowner is allowed to remain in the property and to prepare to move. This time period also gives the homeowner the opportunity to purchase the property back from the mortgage company again. The redemption period varies from one state to another, and in some cases, there may be no time that is permitted. There will simply be a lockbox put on the door when it is permissible to do so. In other cases, however, it may be a matter of months in which you are allowed to remain in the home and prepare for the move.

Legal Assistance - If you are simply moving through the foreclosure process on your own, it can be a very stressful and difficult problem. As you will discover further in this publication, we recommend that you hire a lawyer in order to help you with the foreclosure process. They can file the necessary paperwork to delay the foreclosure to the greatest extent possible, even though that is not officially why they are doing so. If you have legal assistance from a lawyer that is able to help you, they are the ones that can work through the process and make the entire situation much easier to manage.

8. Cash for Keys - Is It Worth It?

Once the foreclosure process begins, the bank is going to try to contact you to work out an agreement that would allow you to maintain the property for an extended amount of time, or perhaps to renegotiate the mortgage. This can be confusing for the homeowner because they wonder why the mortgage company is contacting them, while at the same time a foreclosure is proceeding. They're also going to end up with something that is known as a cash for keys incentive. In this chapter, we are going to talk about cash for keys and why you may be hearing from the mortgage company during such a strange time.

First of all, a planned foreclosure is one that sees its way all the way from the start to the finish. It begins when you miss your first monthly payment and ends when you receive the notice that you must vacate the property. The banks and other lending institutions that hold your mortgage are large corporations with many different departments. Although there is a legal department that is going through with a foreclosure, there is also a department that is interested in seeing you maintain the property. Quite simply, that is why you are hearing from the mortgage company at the same time that you are hearing from their lawyers.

Eventually, you will probably get an offer that comes in the mail that is known as a cash for keys offer. This is a type of incentive that pays you a particular amount of money in order to vacate the property. It can be very attractive, although it can also be rather insulting, depending upon the options, the value of the home and the lending institution that you are dealing with. For a moderate home, you can expect to receive a check for about $500, but if you own a large property, you can see thousands of dollars in a cash for keys incentive.

Many people wonder if it is worth the cash for keys program, in order to move out of the home during that time and to simply put the money in their pocket. It really depends upon how you look at it, and the terms of the program are going to spell it out for you. The following information provides a general guide as to what the banks are looking for when they offer this type of cash for keys program to the homeowner.

First of all, they are going to provide you with the money, only if you move out in a set amount of time. Typically, the amount of time that is provided is approximately 90 days, although it can be longer or less time, depending upon the agreement. You need to consider the amount of money that you are setting aside as a result of the pre-plan foreclosure, as to whether it is actually worth it to sign on the dotted line. For example, if you are putting aside $500 per month in savings and they offer you $500 to move out in 90 days, it may be worth your while to simply stick it out and wait for the foreclosure to proceed.

Another thing to consider is what you are going to do with the property when you leave. Unfortunately, some families have left the property in disrepair, and some have even destroyed it as they were leaving because they were frustrated over the foreclosure process. I would never recommend that you do so because you are basically taking part in a business transaction, and you need to maintain a degree of dignity during this time. That doesn't mean, however, that you need to leave absolutely everything within the home, including appliances that you may have bought with your hard earned money.

A cash for keys program is paying you to leave the home in a broom swept condition. They don't want perfection, but they don't want you to destroy your home on the way out the door. I'm going to assume that you are not going to destroy the home anyway because doing so is a foolhardy decision. That doesn't mean, however, that you may not want to take certain appliances with you if you paid for them outright. Doing so may break the broom swept condition clause in the contract, so you need to look into it carefully.

The bottom line is, there can be some benefits to taking advantage of this type of contract, provided it works to your advantage. It is an attempt that is made by the mortgage company to have you leave the home in good condition and to vacate it before they spend extra money in legal fees. They are still going to come out on top in most cases.

If you don't accept it, you will eventually be foreclosed on and you will need to move out at that time. If you decide not to accept the offer, don't simply feel as if you are going to maintain a home for the long-term. It typically comes close to the time that you are going to need to vacate the home, so it is important for you to begin making preparations to do so. We will talk about this further in the following chapter.

9. Where Will You Go Once You Leave?

The entire foreclosure process is one that can be very difficult. One of the most difficult parts of it, however, is the fact that eventually, you're going to need to leave your home and to make other arrangements for where to live. In this chapter, we are going to consider a few of the options that may be available to you, and some considerations for how you can make a decision that is going to be best for your entire family.

First of all, you need to be cautious that you don't fall for some type of a scam during this difficult time. There are many unscrupulous individuals that claim to be able to help you out with your mortgage and to renegotiate during this difficult time, and they make it seem rather attractive. It is best if you simply hire a lawyer to handle the process because you can often do so at a lower price than your regular mortgage. If you fall for a scam, you could end up losing your home and you could be out on the street without any real notice.

Following along with the foreclosure process and recognizing what is taking place in the stream of time is also vitally important. There are going to be specific things that must be done and that will be handled by the lawyers in the case that you are going through with the foreclosure. This would include filing any necessary paperwork and waiting for additional paperwork to come through. More than likely, the law firm that you hire in your area has been through this process many times with others, so they will be able to give you a general idea of where you're at in the stream of time.

It is also important to be proactive, rather than to be reactive in this type of the situation. Although it can be very stressful when you're going through with the foreclosure, there is eventually going to come a time when you need to step up to the plate and provide for your family. This would include providing a place to move to once the foreclosure takes place. There are a few options that are available, and it is important for you to consider them in advance of being evicted from the property.

Renting - One of the most common things to do once you are facing a foreclosure is to rent an apartment or perhaps a house. Unfortunately, this can also be a very difficult situation because many landlords want information about your credit and they will see that you are facing foreclosure. That is why it is important for you to look in advance and secure a rental before the foreclosure takes place. Otherwise, you may find yourself living in very difficult situations, both financially and physically because you did not prepare properly.

Family - It may also be possible for you to move in with family members for a short amount of time after the foreclosure takes place. If you have family that is willing to do so, it is important that you care for your responsibilities while you are living with them, and that you make it short and sweet. Although family can be great in a crisis situation, it can also be very stressful if you end up overstaying your welcome. Look at it as a short-term option to help you to get back on your feet again, and find something suitable for your family.

Consider all of your options and try to do so with a level head. Don't wait until the time when you are facing eviction from your property to make the final decision, or you may be limited in the decisions that you can make. You want to ensure that you are providing for your family, and although you may have to walk away from your home, there will be another home waiting for you. It is just a matter of finding it and you should find it as early as possible within reason.

10. Saving Money during This Difficult Time

As we discussed many times in this publication, the foreclosure process can be a very stressful time in your life. It also provides an opportunity that can be beneficial, if you take full advantage of it. Although you may be in a situation where you are unable to afford your mortgage any longer, it is unlikely that you have fallen financially to the point where you are only able to afford the bare basics. Being able to put some money aside during this difficult time is one of the best options that you have available.

When you first make the decision to go into foreclosure and to stop making your monthly mortgage payments, you need to make up a new budget. Up until this time in your life, the mortgage payment was probably one of the largest payments and may have represented a significant chunk of money out of your monthly budget. Now that you are no longer making the payments, you want to ensure that you are budgeting for savings, rather than for improving your lifestyle and ending up without anything to show for it. Although you may not be able to save the full amount of your mortgage every month, saving a large percentage of it is going to be beneficial.

Many people are quite surprised with how long the foreclosure process takes, and in some states, it may actually be years between the time that you stop making payments and the time that you are asked to leave the property. If you are able to stay in the property for 24 months, for example, and can put aside $300 per month, you will end up with over $7000 in savings. That money can go a long way in helping you to get into a rental property, or may even work for a down payment on a new property, if you can get the financing for it.

There are also some issues that need to be avoided during this time. For example, some families have allowed the property to fall into disrepair during the time that they are not paying the mortgage payment. Although it can be difficult to continue to repair the property when you know you are leaving it, there can be negative ramifications if you allow it to fall apart before you move. For example, you may someday want to consider the possibility of a short sale, and if the property has fallen into disrepair, you may not qualify. In addition, if you are limiting how much the bank is able to get for the property when they sell it, you may end up with a surprise on your taxes when they tack on the difference, as a source of income to you.

Another issue that you would want to avoid is damaging the property when you are going through with foreclosure. Unfortunately, some people have damaged property, punching holes in the walls, or perhaps cutting pipes and allowing the property to flood. They often do this on the way out of the property when they are asked to move, and it is a shortsighted decision. Not only is it wrong to destroy property that belongs to someone else, but because it does belong to someone else at that point, your actions can also come back to haunt you. If you damage the property as you are leaving, it could be considered vandalism, and you may be in some legal trouble as a result of it.

As you can see, there are benefits to saving money during this difficult time. Although you may not be able to save the full amount of your mortgage, putting aside a little bit of money every month is going to have benefits. Consider doing this from the very first month that you stop making your mortgage payment, and when you eventually need to move, you will find that you have the money to do so.

11. Second Mortgages and HOAs

Although most people are concerned about the mortgage company that holds the primary mortgage in the case of a foreclosure, and rightly so, they may not be the only company that has an interest in the property. Many homeowners took out a second mortgage on their home, in the form of a home equity line of credit or a home equity loan. In addition, the homeowners association that is in your area, if you have one, will also have an interest in the property as well.

When you receive your foreclosure papers, you will find that the other companies that have an interest in the property were also notified about the foreclosure. They were notified because it may be necessary for them to also contact you to protect their interest and the money that they may have invested in the property as well.

In the case of a second mortgage, some homeowners have mistakenly assumed that they did not need to be overly concerned about it, simply because the primary mortgage company was seeking their own foreclosure. Don't be lulled into a false sense of security during this time, however, because the other mortgage company, even if it is a small amount compared to your primary mortgage, is going to have the right to seek foreclosure as well. They can make it very difficult during a time that is already stressful, and you may find that the process is moving along more quickly as a result of the secondary companies getting involved.

As far as your homeowners association is concerned, they are going to be interested in the property if you own any fees to the association. In many cases, a homeowners association will aggressively pursue foreclosure, in order to get their money out of the situation. Any amount of money that is available in equity in the property will go to the homeowners association, if they act quickly. That is why it is important for you to continue to pay your HOA fees and to do so regularly, even during the time when you may be facing foreclosure through your primary mortgage company.

Although there may be cases in which the second mortgage or even the homeowners association may simply write off the money that you owe, that is not always going to be the case. It really depends upon the house, how much money is tied up in it and what options they have, as to whether they're going to pursue their own foreclosure during this time. It is always best if you consider these options and make adjustments where necessary, in order to stay in your home as long as possible.

12. Getting Legal Help

Some homeowners are going to try to go through the foreclosure process on their own. Although it may be possible for you to go through the motions, there are also options to consider when it comes to legal advice as well. In this chapter, we are going to consider some of the benefits of hiring a law firm to handle the foreclosure for you. You may find that it is the best option available in your regard.

First of all, it is important to recognize that most law firms are going to find you, when it comes to a foreclosure. As soon as the foreclosure begins to take place, paperwork is going to be filed and it will be a matter of public record. The law firms are constantly looking for any additional information that is added to the public record in your county as far as foreclosures are concerned, and they have people that look into this information regularly. Once your name comes up in public records, you will begin getting mail from dozens of lawyers offering to help you with the foreclosure process.

Don’t overlook the possibility of using a legal firm in order to help you, simply because the request was unsolicited. The fact of the matter is that there are benefits to using a lawyer when it comes to foreclosure. What are some of the benefits that you may experience?

Delayed Foreclosure – One of the top benefits of hiring a law firm to help you with foreclosure is that it will likely delay the process. Although they are under no obligation to help you delay the process on purpose, they may file the necessary paperwork that allows it to continue. You will be able to discuss this possibility with the lawyer, and at times, they may be able to get you quite a bit of time, which would help you to put more money in savings.

Stress – You need no one to tell you that going through a foreclosure is a very stressful time in life. In order to avoid much of the stress that is associated with it, a law firm can be hired. In most cases, they are going to receive the letters from the other law firm that is handling the foreclosure and they will act as an intermediary, so you don’t have to deal with things directly. In many cases, it is not even necessary for you to go to court because they will handle the entire process for you.

Options – One other reason why you may want to hire a lawyer is because they can provide you with options. In some cases, the court or perhaps the other lawyers are not going to work with you individually, but they will be more likely to work with a lawyer that is hired by you. The same may also be true when it comes to the mortgage company. Talk to your lawyer about the possibility of using some of these options and taking advantage of them to the greatest extent possible.

As you can see, hiring a lawyer is a good choice in almost every aspect. You want to be cautious, however, that you are choosing a law firm that is reputable and has your best interests in mind. You can look up information about what they have to offer online, and you can even find some feedback by others who have used them in the past.

It may also be to your benefit to talk to somebody that has already gone through the foreclosure process and see whom they used to assist them. A word-of-mouth recommendation is worth its weight in gold, especially when it comes to such an important decision. You can use the information that they provide to make a choice for yourself, and you often benefit from doing so.

Foreclosure can be a very difficult time, but if you make the right decisions, it can also be an advantageous time for your family. The information that is provided in this publication was done so to help you through the difficulties and to help you make the best decisions possible. It is up to you as to whether you’re going to walk away from your home or not, but if you decide that it is the best choice for you, make sure you make additional good choices along the way.