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Things you should know about foreclosures

There is always a chance of your lender foreclosing on your home if you miss mortgage payments. Missing several mortgage payments is even worse, and there's a better chance it will lead to foreclosure. Your lender may send you a foreclosure notice via certified mail to warn you of the imminent loss of your property. The lender might also give you a deadline by which you have to clear the property. Losing your property through foreclosure has a negative impact on your credit score, and will affect your chances of obtaining credit in the future.

In some cases, the mortgage amount remaining is more than the value of the asset. You must pay the difference to the bank. Each State has a different law that deals with foreclosures. Some of them are more lenient towards the homeowners and force lenders to give a 30-day notice after the property has been sold.

The best way to avoid foreclosure is to keep paying your mortgage payments on time. But even if you have missed your payment, you may work out a plan to keep your property. You should keep in mind that lenders prefer to stay away from the responsibility of a house, which is why they might negotiate the terms of the loan. You may negotiate with the lender and get them to lower monthly payments or create a repayment plan. Changes in loan repayment plans are made through a process called 'forbearance.' You also have the right to file for bankruptcy before your house is sold. In case you wish to keep this off your credit score, you may sell the property yourself and pay off the loan.

If you have missed a mortgage payment and feel that a foreclosure is coming your way, it is advisable to contact an attorney. The attorney will guide you through the process and might be able to help you keep your property by negotiating with the lender.

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