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Foreclosure Loans: Bridging the Gap

Foreclosure loans are emergency loans that help the homeowner bridge the gap between what they owe to the bank in arrears and the resources they have on hand.

Rising interest rates and falling home values have made keeping up with an Adjustable Rate Mortgage difficult.

Foreclosure Loans: HELOC

In the past, foreclosure loans have primarily been Home Equity Lines of Credit (HELOCs). With so many homeowners being “upside down,” there’s no longer any equity to borrow against.

So if a HELOC is not an option in your case, you’ll be looking at an unsecured personal foreclosure loan. This usually means working with a private investor or private investor group or a personal contact.

Foreclosure Loans: Personal Foreclosure Loan

Private investor’s capitol does not come from institutional sources. A family member, for instance, may lend you the money to bail you out with a no-interest or low interest loan. Or, you may be able to find a private lender on your own. Sometimes these people get lists of homeowners in trouble and make independent offers.

But most likely you’ll be dealing with a private investor’s alliance. These small companies are made up of individuals who invest in a pool. They believe that they’ll make more money in unsecured loans than they would any other way.

Usually these loans are not based on credit history. They will look at your total asset situation and your work and income history.

They are able to cut through the red tape quickly and can often fund in days rather than weeks or months.

If you’re looking for a foreclosure loan, you have two basic choices: the HELOC or private loan. As soon as you realize that you’re going to need a foreclosure loan, begin to look for one. Time is not on your side!