Two Common Foreclosure Misconceptions

There are many misconceptions regarding real estate foreclosures. Many owners that currently cannot afford to make the necessary mortgage payments do not want the public to be aware of this personal tragedy. Misinformation usually arises from second-hand information from inexperienced individuals. Below, please find two common foreclosure misconceptions that arise here in the South Florida real estate market:

1. “Banks just want to steal my home by foreclosure.” This is a common belief by South Florida foreclosure victims that are upset and fed false information. Most banks are inundated with hundreds of foreclosures and pre-foreclosures. This misconception is simply not true, as banks are in the business to lend money. They do not want to be home owners and have to become real estate agents or hire real estate companies to unload their listing inventories. Most banks want to work with the current homeowners that are experiences financial difficulties. It is important that homeowners know that they should first contact their mortgage lending institutions as soon as they cannot make their monthly mortgage payments to try and see if the bank will lower their monthly payments or defer payments.
2. “I have to pay off my entire mortgage to keep my home.” This is another major misconception of banks and lending institutions. When the lender “accelerates” the mortgage or deed of trust because the homeowner stopped making payments they call for the entire balance “due and payable”. This does not mean that the default can’t be cured by other means such as reinstatement but the language of the default notice doesn’t stipulate other solutions. In certain types of foreclosures this time period to cure the default can be as much as 90 days and in other types, as little as a week. The “grace period” to cure a default is clearly outlined in the actual clauses in the loan agreement.

Banks truly do not want get in the real estate selling business. Banks do have a legal obligation to their shareholders to foreclose on delinquent loans, and the bank’s officers can be prosecuted if action isn’t taken timely. The acceleration or default notice could include language in a separate document about the actual requirements to reinstate or cure the delinquent loan. But that is not the case currently. Homeowner in default, should take initial action to read their loan agreement and call their lending representative for options to fix their situation.

Bankers Foreclosures is your source for South Florida Banked Owned Foreclosures. Let our knowledge and expertise of the South Florida market help you find your dream home at an unbelievable price or an investment property for the future. Please Contact Us for more information on our REO Bank Foreclosure listings in the South Florida market.