Foreclosure: Lenders Want To Loan Money, They Don't Want Your House 

by Greg Cryns

Despite what might be read in the press and on television, lenders really don’t want to make loans that people can’t repay.  Mortgage lenders are in the business of making home loans, and don’t want to take possession of houses.  The fact is that mortgage lenders would 

prefer to work with homeowners to keep them from defaulting on the loans. 

Everyone loses in foreclosure.  Mortgage lenders are in business to make a profit, and their profits are made from interest on loans that they write, not on home foreclosures.  Lenders don’t profit from foreclosure.  Neither does it make lenders feel good to have to evict someone from their home. 

However, mortgage lending like any other business has rules for how to run the business, and lenders have to follow those rules to stay in business. 

Homeowners who may be facing foreclosure need to understand the impact of this process.

The psychological and financial upheaval can be devastating.  Sadly, as noted earlier in Foreclosure Basics, a foreclosure is likely to take place at the same time or as a result of another devastating life event, making the foreclosure process even harder to weather.  

Pre-Foreclosure and Foreclosure

What is Pre-foreclosure? Pre-foreclosure refers to the time just before the foreclosure itself begins.  At this point, the homeowner is still in possession of their home, but a notice or other step has been taken by the lender to inform the homeowner that unless they take steps immediately to remedy the defaulted mortgage loan, the lender will proceed with foreclosure.

Do you recall the comments about media attention referred to at the start?  Have you reached a stage where your payments are late, and now there are strangers coming to your home or calling nonstop on the phone, asking to purchase your home?  

Have you been getting multiple mailings, both postcards and letters, from people you have never met, asking to buy your home and give you relief from your situation?  Where do these people get this information about your foreclosure, and are these all scam artists, or are the sincere? 

Clearly, when a mortgage is seriously past due, the mortgage holder will file a legal notice which starts the foreclosure. proceeding  This notice is a legal document that is recorded at the courthouse where your property is located.  

These documents are public records, and are available to all who want to find it.  Many investors in real estate are looking for good deals on property to buy, and they keep an eye on new pre-foreclosure filing documents to keep their mailing list up to date with homeowners who might be in trouble and interested in selling.  

Just be sure that no one is getting this information illegally, and the mortgage company is not selling your personal information.  Upon filing these documents, this signals the beginning of the foreclosure process.

As for whether you can trust any of these people contacting you, it’s possible that some of them are on the up and up.  Continue reading for more on this topic. 

Greg Cryns is the owner of Flat Fee Real Estate Guide - http://www.flatfeerealestateguide.com