There are different reasons why homes are foreclosed. Homeowners may not be able to pay off their mortgage because of they’re sick, lost their jobs, undergoing an expensive divorce or under a mountain of excessive debt. In situations of this sort, the bank or building society may seize the property as specified in the terms of the mortgage contract, and sell it off to other possible clients and investors.
For homeowners, the loss of a house or property could be emotionally debilitating. Here are some shocking stories that might serve as a warning to you—so you’d do your hardest not to let this happen:
1. Fatal flaw
A man named Harry Engel died from a heart attack due to stress shortly after they were wrongfully evicted from their foreclosed home. The incident happened in 2009, when JPMorgan encouraged him to refinance his mortgage loan by suggesting that he intentionally miss a payment. They informed him that it would qualify him for assistance from the government. Engel followed the advice and unfortunately, the bank used his late payment as an excuse to foreclose his property. Lesson? Don’t blindly sign anything. Research every option before you sign your name on the dotted line. (Source: 10 Heart-breaking Foreclosure stories)
There are cases wherein creditors try to adjust the repayment scheme to give homeowners a chance to pay. This is called mortgage modification or special forbearance, a move often used to keep foreclosure at bay. But can such measures really help? Read on to find out:
2. In 2009, Sara Fits called Wells Fargo and inquired for a modification. They requested her to sign a forbearance contract which she thought would help. However, the contract ruined her credit, and made her pay more than the original amount she owed. Another problem arose when she found out Wells Fargo had lost every single fax she had sent for documentation—a reason for which her loan later was denied. Lesson? Know what the contract really means before you sign. (Source: 10 Foreclosure Stories That Will Blow Your Mind)
3. Foreclosure Mistake: Wrong Move, Wrong House
How would you feel if you came home and found all of your belongings missing? Well, this nightmare happened to Alvin and Pat Tjosaas. They thought it was a case of robbery. But the police solved the crime quickly and Wells Fargo turned out to be the culprit behind the crime.
What was unfortunate about the whole thing was that the bank ransacked the wrong home because, in the first place, the Tjosaas family had no mortgage on their house. Even more unfortunate was the fact that even though Wells Fargo had apologised for the mistake, they were still unable to return any of the things they took since they usually quickly dispose of things they re-possess from foreclosed homes.
The mistake could have been avoided if Wells Fargo had only done their research right. This just goes to show how financial institutions—even large ones—often make mistakes. Lesson? Homeowners should really be on their guard with who they consult regarding their financial data. Unless you really know the person you’re dealing with, it’s safer never to assume that you can trust just any financial representative simply because they work for a big name in the industry. (Source: 10 Heart-breaking Foreclosure stories)
So, in case you find yourself in need of financial assistance, going for a personal loan just so the bank won’t foreclose your home, be careful. Think every option through and don’t just take the word of your consultants for it. Do your own research and assess if the information you’re being given is solid so you’d know if your sources are creditable and trustworthy or not.