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Understanding Foreclosure and How to Avoid It

Foreclosure is a serious and often emotional topic. If you’re worried about falling behind on your mortgage or just want to understand the process, you’re not alone, and you’re not out of options. This guide offers clear information about what foreclosure is, how it works, and what steps you can take to prevent it or respond if you’re at risk.

We believe that knowledge, support, and early action can protect your path to homeownership.

What is Foreclosure?

Foreclosure is the legal process a lender uses to recover the remaining balance of a mortgage when a borrower stops making payments and defaults on their loan. If unresolved, it can result in the borrower losing their home.

Foreclosure impacts your credit, financial standing, and future ability to buy another home. However, with early communication and the right strategy, it can often be avoided.

What Triggers a Foreclosure?

  • Missed mortgage payments (typically 3 or more)
  • Failing to pay property taxes (if included in escrow)
  • Violating loan terms or HOA agreements

Foreclosure Process Timeline (May Vary by State):

  1. Missed payments
  2. Lender contacts borrower
  3. Notice of Default is issued
  4. Pre-foreclosure period begins
  5. Foreclosure auction or sale is scheduled
  6. Property is sold or repossessed

Facing hardship doesn’t mean you’re out of options. Let’s explore your next steps together.

CLG Tips: If you're falling behind, talk to your lender or mortgage advisor immediately. We can often work with you to find alternatives.

Ways to Avoid Foreclosure:

  • Loan Modification: Adjusting your mortgage terms to make payments more manageable
  • Forbearance: Temporarily pausing or reducing payments
  • Repayment Plan: Working with your lender to catch up on missed payments over time
  • Refinance: If your financial situation has improved, refinancing could lower your payment
  • Sell the Home: Selling before foreclosure can preserve your credit and equity
  • Deed in Lieu: Voluntarily transferring the property back to the lender to avoid foreclosure

What CLG Can Do to Help

We believe in long-term relationships, and that means standing by you in tough times, not just during closing. If you’re at risk of foreclosure or simply want to explore your options, we’re here to help.

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