Foreclosure Loan
“A Foreclosure Loan To Stop A Foreclosure Action Can Potentially Be Secured In A Number Of Different Ways”
When we speak of a foreclosure loan, we’re referring to a loan used to partially or fully provide the funds necessary to stop a foreclosure action from proceeding.
This is most typically provided in a form of a new mortgage against the property impacted by the foreclosure procedure, although it doesn’t have to be the same property.
In some cases, other parcels of land are leveraged as partial or full security for the new mortgage.
Other foreclosure mortgage strategies include providing a loan against the mortgage registered against the subject property, purchasing the existing mortgage at face value or some agreed upon discount, and leveraging other non real estate assets to provide incremental funds towards the outstanding debt.
In the case of a loan on a mortgage, a private mortgage lender would be looking to finance a portion of registered mortgage amount and would consider the borrower’s equity in the property behind the target mortgage as well as the amount the mortgage has been paid down versus the amount registered.
This type of strategy can be used instead of a new mortgage when there is insufficient security value to pay out all registered mortgages, but enough equity available to pay out the first mortgage foreclosure action.
A similar strategy is when a private mortgage lender actually purchases the existing mortgage, typically at some type of discounted price to increase their return on investment. By accepting an offer to purchase the existing mortgage, the lender pushing for foreclosure has an opportunity to receive a fixed sum of funds versus taking their chances liquidating the asset on the open market.
Each scenario will dictate which of these strategies is the most relevant or relevant at all.
And there can be many different nuances to consider as well with each situation. As a result, the descriptions provided above for each of these strategies is grossly simplified and can become quite involved for any given scenario.
The point here is that there can be a number of ways a foreclosure loan can be placed through a private lender to provide the funds required to stop a foreclosure action and keep you in your home or property.
But the key to any of these approaches is to be working with an experienced mortgage broker who can properly assess the situation and provide workable solutions with private lenders that are interested in these types of deals.
If you’re looking for a foreclosure loan and would like to find out more about your options, give me a call and we can go over your situation together.