Mistaken Assumptions About Foreclosure
When it comes to our associations with home foreclosures, most people believe that foreclosures are often linked with poor people or those of limited means. This mistaken premise is unfortunate in some ways, but also understandable. As our readers likely know, foreclosure occurs when a mortgage loan borrower defaults and is unable to repay his or her loan according to its contractually binding schedule. Naturally, we think if a person cannot pay, they must be poor or low-income earners.
Foreclosure is a “last resort” option for lenders, because foreclosure involves a great deal of legal work, costs and bad relations with previous good clients. For many mortgage loan borrowers, foreclosure is also the last straw since most homeowners recognize that their mortgage debt is their most important responsibility because it often keeps a roof over their family’s head. For most homeowners, the idea of facing foreclosure is gut-wrenching. Lenders’ business models prefer payments, so foreclosure is not the preferred option for a delinquent homeowner. In fact, in a foreclosure sale, lenders often fail to recover the full balance of what is owed on the loan. In some cases, lenders have to pursue the borrower for the balance in a deficiency judgment process. Still, this comes with additional costs and limitations, especially if the borrower files for bankruptcy protection (which we highly recommend for certain borrowers).
The truth is that foreclosure can strike nearly any person, not just those who struggle from paycheck to paycheck. In some cases, even homeowners with lavish, extravagant residences can face foreclosure for one reason or another. Here at Financial Freedom Advocates, we’ve always been careful to emphasize the fact that financial difficulties can befall just about anyone in society, including the hardworking and the honest.
High Visibility Cases Provide Important Lessons
When we examine some of the high visibility cases involving extravagant home foreclosures, we can see how easily it can be for people to fall into financial problems. Consider the example of professional athletes who run into money issues. There have been many, many well-documented stories involving former professional athletes who lost large sums of money and then lost lavish homes to foreclosure.
At the end of his NBA career, former basketball star Latrell Sprewell, for instance, had earned over $90 million. Despite this impressive financial performance, Mr. Sprewell has faced a plethora of financial issues, including repossession of a yacht, along with multiple home foreclosures. In 2008, Mr. Sprewell’s Milwaukee-area home was placed into foreclosure status; subsequently in July, 2009, another home owned by Sprewell was placed into foreclosure status, this one located in Westchester County, New York. Of course, our purpose here isn’t to be overly harsh with Mr. Sprewell, but merely to show the fact that even those who’ve earned millions and millions of dollars can still experience financial challenges.
Explore Possibilities When Times are Tough
If you’re experiencing financial difficulties, remember that there is always a path forward. Our society has created various avenues to take when it comes to dealing with financial problems and rebuilding a solid future. If you’re having trouble making your mortgage payments, be sure to exhaustively consider all the options you have at your disposal. You can consider payment plans or installments, forbearance, and even bankruptcy depending on the situation. Whatever your specific circumstances may be, it’s imperative to know that you aren’t destined to be trapped in rough financial waters forever.
Contact Financial Freedom Advocates Today to Learn More
If you would like to know more, get in touch with Financial Freedom Advocates now by calling us at 786-668-6688.