A lot of foreclosure victims seem to have a misconception of what a foreclosure moratorium is. Many seem to think there is a nationwide moratorium that is stopping foreclosures, while others think that Obama is bailing everyone out of foreclosure. These two lines of thinking couldn't be further from reality.
If you are losing your home, please don't expect a bailout plan to save your home! More homes are lost and people are being evicted; while foreclosure victims think their lender is trying to get them a workout plan, their home gets auctioned off right out from under them.
If you are waiting on your servicer to approve a modification or bailout, you need to make sure you have a back up plan for when theydeliver the bad news! And that's assuming they are even doing anything for you in the first place. Many lenders tell you they are "working" on your case, while they quietly continue foreclosing on your home. This is a huge problem and foreclosure victims need to wake up and stop believing the lies!
Foreclosures are still on the rise in many areas and because of this, many families are being left on the streets. As local governments realize the federal bailout plan isn't working, they are beginning to implement their own foreclosure rules and moratoriums.
Federal moratoriums are not a mandatory requirement. In some cases, only certain loans qualify for the moratorium. In others, the lenders are only asked to be involved, but no laws or rules are forcing them.
When a local court or government imposes a moratorium, it usually applies to all foreclosures in that particular area.
Many of the larger banks have voluntarily agreed to these moratoriums, even when it was not required of them by law, but for the most part, the moratoriums have ended and banks are back to foreclosing on properties in full swing.
Foreclosure moratoriums have been tried, sporadically, over the last year.
Different banks, courts, or government agencies have determined that it may help. In reality, these moratoriums are not doing much of anything to help stop foreclosure. They are simply putting off a problem until sometime in the future; as we all know, procrastination is never a good thing. Local courts seem to be following the federal government's lead, by starting with a 90 day moratorium and allowing homeowners to stop foreclosure before this 90 day period ends.
The problem with this concept is that no one really knows the steps needed to stop foreclosure. Foreclosure victims think the government is helping them, so they sit back on do nothing. Lenders don't understand what to do either, so they are just letting everyone apply for a modification, while giving them false hope that they will get the mod.
Today, one thing is completely apparent, the only homeowners getting help are those who take action on their own and forget about bailout plans and moratoriums! Those who find their own way out of foreclosure or hire a professional to help them are saving their homes at a much higher percentage rate. In fact, many loan modification companies have success rates well above 90%. This is much better than the 20% success rate our government may one day achieve.
Others are still losing their property just as quickly as before; even faster in most cases, because court systems and lenders are now streamlining the foreclosure process. There are so many foreclosure cases that foreclosure victims are no longer getting a just trial. Some courts are rushing through foreclosure cases in just a few minutes per case. Proper documentation is no longer necessary and the foreclosure victims never even have a chance without a lawyer to protect them.
Originally it was though that a moratorium would provide families enough time for the government to offer a loan mod plan, but now we all realize that the government's idea of a bailout doesn't really assist the average foreclosure victim. I think it's common knowledge that procrastination is never a positivething and that's basically what these moratoriums are. As an alternative to coming up with an actual solution, it was easier to put the issue off for 90 days.
The main problem with a moratorium is that it gives the foreclosure victim a false sense of wellbeing. They think they will get to keep their home; in reality, after the moratorium ends (most moratoriums last 90 days) the foreclosure process will continue as if it never stopped. In some cases, the foreclosure process even continues during the moratorium and the sale happens almost directly after it ends.
If you are fortunate enough to have a foreclosure that has been paused by a moratorium, the don't waste any time establishing a solution, so your home is not sold when the moratorium is finished! Use this time wisely to recover from your financial hardship, or to hire a professional to negotiate the terms of a loan modification with your lender.
There are many options to stop foreclosure, but remember, a moratorium is not one of them! Unless the foreclosure situation is fixed during this time, the home will be lost when the moratorium ends.
Nick publishes articles to give advice to borrowers who are the in the process of stopping foreclosure on their houses and learning how to recover their finances afterward. His other articles describe various solutions to foreclosure, including
mortgage modification, obtaining a hard money refinance, and even responding to a foreclosure lawsuit to get more time from the courts to negotiate a better alternative. Visit his site today to read more about how foreclosure works and how you can stop he process while you still have time: http://www.foreclosurefish.net/
