Why might a farm go into foreclosure?


Quick Answer

Circumstances that may cause a farm to go into foreclosure include illness, a death and loss of employment. A divorce and unexpected maintenance expenses may also cause a farm to go into foreclosure, along with any circumstance that causes the owner to become unable to make timely loan payments.

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Full Answer

Foreclosure is the legal process lenders take to recover the balance left on a loan that a home or farm owner is unable to pay. A person can often avoid foreclosure by contacting the lender to obtain information about programs that may be available to prevent the foreclosure process. Lenders often prefer to work with mortgage loan holders to help them honor the terms of their loans rather than go through the legal processes of foreclosing.

The Obama Administration has put forth several different programs to help home and farm owners avoid foreclosure when circumstances prevent them from making timely loan payments. Programs designed to assist those who may benefit from a modified or refinanced loan include the Home Affordable Modification Program (HAMP), Principal Reduction Alternative (PRA) and Home Affordable Refinance Program (HARP). Programs available for those who become unemployed include the Home Affordable Unemployment Program, Emergency Homeowners Loan Program and FHA Special Forbearance.

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