One Fact To Help You Save A Property From Foreclosure

By Author: Nick Adama
Total Articles: 197
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A smart home owner can use a slightly obscure fact to their advantage when trying to stop foreclosure by their lender. Did you know that it is cheaper for banks to keep you in your home than actually take a property to foreclosure?

On average, it costs the lender between $60,000 and $80,000 to foreclose on a home. In the long term, it would cost less for them to work with the borrower to find a solution to the problem than remove them from their residence. Often, the home owner has to be the one to raise this issue to the mortgage company. It can be a very effective negotiating tool.

Why is it so expensive to foreclose? To begin with, there are the costs of going through the legal process of eviction. The banks have to hire local law firms that specialize in evicting people. Second, there are costs associated with filing the paperwork and eviction proceedings.

If the home owners fight back, then the bank's legal fees begin to increase faster and faster. Once a foreclosure or eviction filing is final, then the bank has to pay the costs of evicting foreclosure victims if they refuse to leave the dwelling voluntarily. ...
... A lender with any intelligence would want to negotiate with a home owner to stop foreclosure.

After obtaining the property from the foreclosed home owner, the lender is then left to deal with the aftermath. Often, if a home owner doesn't have the money to keep up their mortgage payments, they also did not have the money to maintain the property. And some of them, in frustration over what was going on, do damage to the property before they are forced to leave. All of this now falls on the mortgage company to deal with.

Whether the property was destroyed due to vandalism or spite, the lender will usually not do anything to fix it. This causes the value of the property to fall and the longer it is left abandoned, the further the value falls. In the end, the lender will be offered far less for the property than what they would have if they had worked with the borrowers to stop foreclosure before it began.

Even if the bank does nothing to repair the property, they still have to confront the other costs in owning that property. Any property taxes that are due on the property have to be paid to the county. And, some level of home owner's insurance will need to be purchased for the residence to insure the lender from accidents to the property. And, when they try to sell the property, the bank will need to use local real estate brokers.

That means they will have to pay commission fees to the agent when the property is ultimately sold. It just makes little economic sense for a bank to incur those costs when it would be more efficient for them to negotiate with the current borrowers. This is just one piece of information that can help you to save your property from foreclosure.
Nick publishes information on how property owners can prevent foreclosure on their own. His site describes various methods to do this, including foreclosure refinancing, mortgage modification, bankruptcy, and more. Visit the site to download several e-books examining various aspects of the foreclosure process: http://www.foreclosurefish.com/