Stop foreclosure loans are loans that a defaulter-borrower avails himself of in order to offset the impending danger of foreclosure by the bank or the secured creditor. Foreclosure is such an unpleasant eventuality leading to embarrassment, bad financial reputation, and ruin that no one would voluntarily opt for it. The severity is such that the borrower could not get any more loans or other financial assistance, if he/she is a foreclosure victim. The borrower, on receiving notice of foreclosure by the bank, should seek professional assistance to rectify the situation and preclude foreclosure. The professional rendering assistance would be able to deal with the situation with equanimity, unlike the borrower who could resort to a panic reaction, and lead the victim to an escape route that will save him from legal foreclosure. The borrower would be led to the bank for an honest discussion when he can explain the situation. If he is sure that his plans for financial recuperation would start paying dividends and that he would be able to make payments without failure in future, the bank might even redraft the mortgage or chart out a new mortgage deed, reducing the payment installments and prolonging the tenure to ease out the principal debtor. Otherwise, judging from the viability of the plans chalked out by the borrower in consultation with the assistance-agency, the bank would issue a new loan with which the present debt could be offset and even other needs could be met. The bank will insert provisions in the loan agreement ensuring prompt payments in installments conducive to the borrower. It would not be that easy for the defaulter-borrower who already faces a financially murky situation to get bargain loans. But explaining the circumstances forced upon him and the prospects of a financial rejuvenation, the victim can get a loan sufficient to set off the debt and even meet immediate needs. |
