Financial hard times can affect anyone at anytime and anywhere. When facing these hardships sometimes your home can be affected when you start missing mortgage payments.
When you initially sign your refinance documents you are securing the mortgage against your property. The bank or mortgage company will apply for a court order when you default on your payments, the mortgage company or the bank will try to repossess your property.
Each state differs in the process of how quickly the bank will repossess your property. Some foreclosures can be quick and some can be very lengthy.
In order to avoid foreclosure there are some options that you do have. The first option of course is to refinance your property and then pay the legal fees from the foreclosure of your house. When you do this you will be paying out all of your current debt and will have only one payment as the bank will not allow you to keep any loans or credit cards.
Temporary arrangements are probably your best option if you do get behind in your payments. The bank will allow these temporary arrangements to pay as long as your keep your word. Once this is broken then the bank will immediately file for foreclosure.
The last and I say only the last resort is to file for bankruptcy. This option is the worst option as it not only gets rid of the foreclosure but your credit will be ruined for at least 7 years. Typically a person can obtain new credit but at this point in won't be easy for at least a couple of years. This option should only be used as your last resort; even then I still would not suggest this option.
If the foreclosure is completed before you chose any of the options then the lender can sell your property and will also keep the proceeds of the sale to pay any debts such as legal fees. If the sale does not cover all the costs then the bank can file for the deficient funds.
Let's hope that you do not let the process get this far as allowing this really benefits no one.
