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Foreclosure is the legal process a creditor must go through to take possession of a property when mortgage payments are not being made. Most people do not know enough about the foreclosure process to defend themselves when a creditor threatens to take that step. Just as an accountant is trained to help clients get the best possible tax return, a foreclosure consultant knows the ins and outs of the foreclosure process. When threatened with foreclosure of their homes, businesses, or other property, some people seek help from a foreclosure consultant.
The first thing a foreclosure consultant will do is to review the client's financial situation to find out why the client fell behind in payments and what the client is capable of paying now. Using that information, he or she will negotiate with the lender, usually a bank or credit union, and review possible actions with the client. After talking to the lender, the foreclosure consultant will create a financial plan to prove to the lender that the client can pay on the schedule agreed upon.
There are several things a foreclosure consultant can do to help the client avoid or mitigate the effects of a foreclosure. If the client is suffering a temporary financial setback, the consultant may negotiate a forbearance. The lender waives the legal right to collect on the loan for a certain amount of time.
The consultant may also be able to renegotiate the terms of the lease. The payment schedule may be changed so that the client can make smaller payments over a longer period of time. The foreclosure consultant may also help clients to get another loan or to avoid the damage that foreclosure would cause to a credit score.
Though a foreclosure consultant can be helpful, homeowners should use discretion when choosing one. In many areas, the foreclosure consulting business is not regulated. Anyone can call himself a foreclosure consultant whether he has the proper training or not. Government websites offer lists of verified consultants. If a consultant does not appear on one of these lists or seeks out the homeowner with an offer to help, the homeowner should be wary.
Some foreclosure consultants offer their services for free through government programs. Others charge for their services. Homeowners should be suspicious of any consultant who requests money up front or if she requires interest in the property before taking on the client.
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