Home Foreclosure Essay

Foreclosure of a house is a horrifying reality that can happen to some families and homeowners. I personally have experience with home foreclosure. To begin, a home foreclosure occurs when a homeowner is unable to make mortgage payments on their house. In this case, the bank will take ownership of the house in question, and it will eventually get sold. There are three steps to a home foreclosure, and a house cannot be sold until all three steps are completed. The first step is called pre-foreclosure, which is where the bank notifies the homeowner that he or she is two months behind on their mortgage payments. From this point, the homeowner has two or three months to sell their house on a short sale, or to refinance their loan. The second step is the auction, where the bank schedules an auction …show more content…
Perhaps one of the most relevant causes of home foreclosure is something called equity, specifically negative equity. Negative equity is a term which means that a homeowner owes more in loans on a house than what the house is worth, which directly leads to a foreclosure. Certain people may also choose to stop paying mortgage on a home, also know as “walking away;” this may be due to falling property values.There are also certain natural and unpredictable causes that can lead to foreclosure, such as an illness, a divorce of a couple, or a death in the family. These unpredictable situations can lead to extensive monetary expenses, which can, in turn, lead to negative equity, and foreclosure.
Despite many causes of foreclosure, there are also many things homeowners can do to prevent a foreclosure on their home. A homeowner may file for bankruptcy as a last resort in order to pause the foreclosure process. This is not a guarantee, however, because the court could decide that foreclosure is the best course of action, and would cancel the bankruptcy. The canceled bankruptcy would in turn continue the foreclosure