Foreclosure

Discussion in Mortgage & House Payments started by ExpertAdvice • Mar 1, 2015.

  1. ExpertAdvice

    ExpertAdviceActive Member

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    Have you ever had to deal with foreclosure? or, do you know of anyone that has been through foreclosure? I'm interested in knowing why it happens in the real world, because I'm sure there are many other reasons why foreclosures take place, other than, not having a job to repay.
     
  2. MrsJones

    MrsJonesActive Member

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    Foreclosure only happens when the mortgage hasn't been paid for a certain period of time. That is the only reason it happens. If the house catches fire the mortgage doesn't and still remains the homeowner's responsibility. Hopefully there is homeowner's insurance that will take care of it.

    Some people will walk away from their home because of financial crisis which causes the inability to pay on the mortgage. As long as your name is on the deed and you signed the loan for the house you remain responsible.
     
  3. ExpertAdvice

    ExpertAdviceActive Member

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    thanks for your comment @MrsJones@MrsJones , also, to clarify,I understand that once a mortgage is "active" on a property, the property is automatically insured. Normally, it is the lending institution that insures a part of, or all of the house.
     
  4. clairebeautiful

    clairebeautifulActive Member

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    No. The lending institution doesn't insure the house (or at least doesn't pay for it). The lending institution generally REQUIRES having home owners insurance. If you live in a flood zone they often require flood insurance as well. Most banks require proof of insurance in order to issue a mortgage.

    As for foreclosure - you have to think of it a little like filing for bankruptcy. Sure, you default on a loan and that means that you are no longer on the hook for payments. But it also means you lose everything you've already put in (because you lose the house entirely) and you also wreck your credit for buying another house within a minimum of 7 years, but possibly longer.
     
  5. Jamille

    JamilleActive Member

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    I am presently living on a property which I bought as a foreclosed unit from our government's housing loan agency. The original homeowners apparently have not visited the house for the past two years prior to its foreclosure and had been marked as 'abandoned'. When I took over the house, I realized that most of their things are still inside the unit except that there were no TV, ref, aircon, electric fan, or any appliances that households use on a daily basis. But there was a large cabinet, plates, utensils, bed, books, food containers, images, and toys. I have no idea what happened to the former owners but these are things that can fetch a large amount if they were just sold.

    Based on the documents and pictures that I found inside, there were apparently two families living on the house, and the women were siblings. From the neighbors who used to be close to them, I learned that the siblings were sharing in the monthly amortization of the house. When they had a falling out, that's when the payment problems began. The falling out also happened after their parents' death. That was quite unfortunate. They have already made improvements on the house and had extended the house area and placed tiles on half of the house. However, they must have gone through a lot of financial difficulties that they could not even afford to replace or repair their water connection inside the house. Personally, I will not introduce huge improvements on a mortgaged house unless I have a reasonable assurance that I can pay the mortgage or sell the house at a fair price.