Homeowners are now losing their homes to foreclosure at an alarming rate never before seen.
The cause of this is due in large part to the banking industry themselves by offering "too good to be true" adjustable rate loans to anyone that was able to sign with a pen.
These attractive loans were offered to potential borrowers without foresight and these borrowers did not recognize the future challenges with regards to repaying the loans when the rate increased.
This coupled with a slew of other economic challenges helped create this current recession that millions of U.
S.
homeowners are experiencing.
The worst manifestation of this recession though is the loss of jobs and homes.
There is however a last ditch effort for the homeowner.
Whenever banks or other lenders foreclose on a property they not only lose the revenue from receiving monthly mortgage payments, but also end up paying taxes on the property with very little hope of selling the property at full appraised value.
Foreclosing on one or even fifty properties probably would not hurt any bank, but with the amount of foreclosures occurring now banks are creating their own demise.
This is what has been happening throughout the country.
This of course is no consolation to those homeowners who are in foreclosure now or have just gone through foreclosure.
Not only has the homeowner's credit rating been destroyed, but these individuals are finding it extremely difficult to get financing for another home.
Even rental homes can be difficult to find seeing as how more and more landlords are requiring credit checks of prospective tenants.
Some lenders are willing to lower the interest rate and cut the homeowner's monthly payment in hopes that this will enable the individual the ability to make the necessary monthly payments.
Some banks will even grant forbearance and allow the homeowner the chance to catch up.
There may be other methods that a financial advisor or an attorney knowledgeable in real estate law may be aware of.
Never hesitate to consult with these resources.
Most of the time these professionals offer free initial consultations.
When all else fails and there is no way to avoid foreclosure there is one last ditch effort.
The homeowner can do what is called deed in lieu of foreclosure.
The only purpose of this last resort is to avoid having one's credit rating destroyed for years to come.
Essentially a deed in lieu of foreclosure is when the homeowner mails the keys and mortgage deed back to the lender via certified mail.
Again this is a last resort that should not be taken lightly unless there is no other alternative to foreclosure.
Consulting with a real estate attorney will help ensure that this one chance is handled properly.
By salvaging one's credit rating it should be easier in the future to receive financing to purchase another home or even temporarily find a house to rent while the individual focuses on improving their existing credit rating.
While no analyst or realtor can accurately predict the duration of the housing market slump, history has shown that the real estate market and lending will come back around.
It is just a matter of time in which the individual can improve their credit rating.