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Understanding Why Your Lender is Against Foreclosure

Posted on in Arlington Heights Foreclosure Attorney

Are you currently experiencing the onset of extreme financial hardship and perhaps thinking of tipping your hand and cashing it in when it comes to your home mortgage? Perhaps you should think again. Saving your home may be worth the fight because in all reality, your mortgage lender actually does not want to repossess your home.

As defined by QFINANCE, a collaborative effort of over 300 of the world's leading financial professionals, repossession is simply the return of merchandise after a period of default of time payments. Statistically defined, one in every 1126 homes throughout the United States are currently under foreclosure status as of August 2014.

Although easily defined by the professionals, the definition surely becomes more involved as it pertains to your personal financial security and quality of life. Before placing a call to an experienced foreclosure attorney to discuss your options, take note of why the bank really does not want to enter into the foreclosure process. Quite simply, they are not in the real estate industry to produce profit from the short sale of your home. Perhaps better understanding of why your mortgage lender is not breaking down your door to repossess your home may provide you with better insight of what the future may hold before seeking professional legal counsel.

Stay Positive

If you are even one month behind in payment, you should have already contacted your lender's loss mitigation department to discuss your repayment options. By staying positive and proactive you may achieve a higher rate of helpful communication from your lender. Taking on a defeatist attitude will only affect the tone of communication between you and your lender and possibly hinder a positive outcome.

Lender Perspective

Quite frankly, the foreclosure process is an annoyance to your lender. As mentioned, they are not in the real estate business and often repossessing a home means netting less money via the short sale of your home rather than adjusting your loan terms through loan modification to bring your mortgage current.

The lender would much rather see you stay in the home than become involved in the legalities of the foreclosure process. If initiated, foreclosure only decreases your lender's bottom line, therefore defeating the purpose of why they are in the business of making money.

Stay Humble

For many homeowners when facing foreclosure there is a tendency to stir up contempt against their mortgage lender. In all honesty, your lender is not responsible for your current financial drain. By presenting your case with due diligence lenders may appear less reluctant to offer alternative repayment options such as catching up on past due balances before satisfying current obligations or waiving late fees to lower the total cost of repayment.

Real Property

As your home was purchased with the American Dream in mind, the lender does not share the same sentiment. When a lender has to repossess a home they are now dealing with uninhabited real property, maintenance issues and all other associated costs.

Realistic Loss

If entering into foreclosure take note, both the homeowner and the lender are losing money and valuable equity. No one comes out the winner. The bank loses money even if the home is sold at auction and you, the homeowner lose years of interest and perhaps principle paid as well as receiving a newly inked black mark on your credit report.

Gateway to Bankruptcy

For those facing this emotional quandary, petitioning for debt protection under Chapter 7 bankruptcy may also be within sight. Although this process offers financial respite of over due bills and protection from credit collection agencies, your lender does not share your financial enthusiasm. If Chapter 7 bankruptcy would be awarded, you would be forgiven of your debt and still remain in your home. This is the primary reason that your lender will opt for alternative options for you to maintain ownership of your home rather than entering into foreclosure status.

The Bottom Line

The bottom line, the bank wants their money. They are not willing to lose the interest calculated on the original loan agreement nor do they want to add your home to their expansive foreclosure listing report. They would rather work with you to secure the total amount of recoverable funds as initially agreed upon.

Lessons Learned

As mentioned, stay positive. Options are available both through your lender and your qualified foreclosure attorney. If you truly want to remain a homeowner keep in mind this is also the objective of your lender as well. Work out the situation and remember, foreclosure may appear the best recourse but in all reality it simply costs everyone involved time and money.

If you are struggling with the possibility of foreclosure, the Arlington Heights foreclosure attorneys of Newland & Newland, LLP are ready to join in the discussion with you and your lender to reach a resolution to retain your status as an Illinois homeowner. Our legal team can discuss such viable options as loss mitigation, loan default management, modification strategies or opting for Chapter 7 bankruptcy protection if it is in your best interest. Contact us at one of our four locations today to schedule an initial consultation.

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