Since the economic crash of almost three years ago ended in tragedy for a lot of homeowners, people are beginning to get weird ideas about lending institutions and their homes. The most common of these misguided assumptions is that lending institutions are only willing to grant the loans so they can immediately grab it back through foreclosures.
That is such a wrong assumption and whoever thought it up was really into the panic mode. NO, lenders do not like to foreclose for if they do they end up losing, just as their borrower lost their home.
Lenders Don’t Want to Foreclose
For one thing, there is always the option for a loan modification which the borrower could apply for. This can even be done a day before the foreclosure! So if you are a borrower and you just suffered a financial setback where you can no longer afford to pay the amortization at the present rate but can if the rate were lower, then you can call the lenders and ask them the modify your loan according to your new capacity to pay.
This is easily done by the lenders and they would only be too happy to do it for this means that they do not have to foreclose and have a property that they have to hold for some time before they can have another buyer for it.
However, you, the borrower, would have to also realize that the lower rates will also mean a longer time to pay off the loan. This is nothing against you – that is just how business works. Fortunately, if you are going to have another change in your financial status and you can now afford to pay a higher monthly amortization, again the lender can modify your home loan so you can pay them the higher rate.
Do not listen to misguiding rumours regarding foreclosures. There is always the law to back up the regular man. Foreclosures are bad for both the borrower and the lender, so there is always that light at the end of the tunnel that would benefit both parties.