I’m going to talk to you about the main two reasons that properties end up in foreclosure.
First reason is a triggering money event, this is for example you lost your job or a recession and you couldn’t find a job that paid the similar amount and you have a spouse that also can’t find enough money or maybe they didn’t qualify alone for a loan or what they make is it sufficient to pay it so you start to become delinquent and after a while the bank files for foreclosure.
The Second reason why properties end up in foreclosure is that the husband and wife end up fighting and divorce. Then in the divorce proceedings they end up spending a ton of money because divorce is incredibly expensive, I’m talking easily five figures, sometimes it’s six figures especially if you own multiple assets or multiple pieces of real estate.
But in my opinion, the main reason that properties go to foreclosure is that somebody dies. They passed away and nobody’s paying the mortgage because that person passed away. So, you end up having family members that have no idea about how to pass it on to their name, what they have as far as options, they can’t afford it either, they live in different states, they can’t agree to anything, they don’t know how to pay for the probate, they don’t know that they need an attorney to do the probate, they don’t know that probate takes a long time and usually these families wait until the very end, until it’s like a month away from the gavel going sold at the clerk’s auction and by then it’s too late.
So these are the two big reasons why properties end up in foreclosure, if you don’t want your property to end up in foreclosure, if you want to prevent your family from having an all-out war regarding your real estate then it’s really important to do effective estate planning and especially to do some post and premarital agreements, to make sure that specific pieces of real estate you address it very quickly from the onset with your future spouse or your current spouse, how those assets are going to be divided but also how those assets are going to be passed along when you pass away. In a way, keeps them out of court and out of conflict because once that gavels down there’s no going back.
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