Planning Intermediate: How to Avoid Foreclosure

Test your knowledge

Choose wisely. There is only one correct answer to each question.

Keep studying!

Review your answers below to learn more.

Why would a homeowner facing foreclosure try to sell their home before the lender forecloses?

If the house has appreciated in value, a homeowner might consider selling it, paying off the mortgage, and buying a house that is more affordable

The homeowner might want to move before the foreclosure is resolved, and selling the house is the best way to do that

A homeowner might want to sell their home before the lender forecloses, if the costs of the foreclosure, including legal fees, are unaffordable

If the house has appreciated in value, a homeowner might consider selling it, paying off the mortgage, and buying a house that is more affordable. This also assures that a foreclosure is not reported to credit bureaus.

When negotiating with a lender, what option or options might you suggest?

Forbearance is really your only option in negotiations

Loan modifications and loan reinstatement are options in negotiating with your lender

Most lenders are not interested in negotiating

Loan modifications and loan reinstatement are options in negotiating with your lender. Lenders would rather negotiate with you than foreclose on your home, and would consider several repayment options.

How do the federal government programs that help homeowners facing foreclosure typically work?

They pay off the homeowners' mortgages

They modify the mortgage loans

They buy the homes

All of the above

They modify the mortgage loans. These programs modify the loans in various ways in order to reduce homeowners' monthly payments.

With home foreclosures, how does an "automatic stay" work?

After a homeowner files for bankruptcy, an automatic stay allows the homeowner to remain in the house permanently

An automatic stay legally stops the foreclosure process until the lender has the stay lifted

During bankruptcy cases, an automatic stay allows the lender to keep collecting mortgage payments until the case is closed

An automatic stay legally stops the foreclosure process until the lender has the stay lifted. The homeowner is allowed to remain in the home until the case is resolved or the stay is lifted.

Federal programs for homeowners facing foreclosure are available to all homeowners, regardless of their situation.

True

False

False. There are many requirements that homeowners must meet, some of them quite demanding.