It’s a notice that no one wants to get. Your home is in foreclosure. The panic and fear set in immediately. What are we doing to do? Where are we going to live? What long-term repercussions will come from this? How can I take care of my family moving forward?
If you’ve found yourself in this position, you’ve likely gone quite a few months without paying your mortgage. Many people have a hard time accepting what is happening to them, and it’s totally understandable. Going into foreclosure is a scary experience that no one should have to go through alone. If you take action early, you can figure out a way to avoid foreclosure altogether. Property Pals is here to help.
The Steps of the Foreclosure Process
Lenders tend to accept one or two missing payments, but typically around the third month without payment, the lender initiates phase one of the foreclosure process, the demand letter. This formal document will state that the amount owed must be paid within the next 30 days. It is a good idea to start looking into potential solutions at this point. If you cannot get caught up on payments within the next month, you should look into selling your home during this time frame to avoid foreclosure.
If no payments are made by the fourth month, a notice of default is issued. This is the final chance you have to get up to date on payments within the next 30 days or the foreclosure process will formally begin. At that point, the lender will file the correct forms with the court and record a notice of trustee’s sale. This will include the time and location of the sale and the opening bid.
The house is now officially up for public auction. At this point, the lender is trying to receive a bid high enough to cover the outstanding loan, liens, taxes, and additional costs. If the house is not sold at auction, the lender will become the official owner. Whether it’s sold at auction or it becomes the property of the lender, the borrowers will be evicted at this point.
Can I Stop a Foreclosure?
You have until the day the property is sold at auction to stop the foreclosure. The only way to do this is to make up all the missed payments plus any fees accrued due to the foreclosure process. Most lenders would prefer working with you rather than foreclosing on your home. You should always get in contact with your lender as soon as you start experiencing financial hardships. If you cannot catch up on payments, you should consider selling your home for the equity to pay what you owe.
Options For Selling Your Home In Pre-foreclosure
Do some research into how much your home is worth and then figure out exactly how much money you owe on your mortgage plus the fees. You will also need to factor in any fees relating to selling your home. After you’ve calculated what you can make and what you owe, you can determine if selling your home will make you enough to pay off your mortgage and expenses. When looking to sell your home before foreclosure, you should work with a licensed real estate agent. In theory, selling your home at this stage should be similar to selling your home normally, depending on the market. There is no reason to disclose to potential buyers that you’re experiencing financial issues.
If the proceeds of selling your house won’t cover all of your costs, then your next option is a short sale. Your lender must approve moving forward with a short sale. When you sell your home this way, you will be selling it for less money than you owe. Lenders can either forgive the difference in price or demand the homeowner pays the difference through a deficiency judgment.
Are Short Sales Difficult?
Short sales can be a time-consuming and stressful process. If you’ve fallen behind on your mortgage payments, you’re likely experiencing many other stresses outside of the foreclosure process. A short sale can take up to a year depending on your individual situation. Not only do you need to work directly with your lender to get the approvals you need, but you need to manage any liens or judgments that are attached to the property as well.
Communication with banks during this process can be slow and frustrating. There are hundreds of documents that need to get processed which often get lost or become outdated. Not only that, but your home could still go into foreclosure even while you’re in the process of trying to get a short sale approved.
How Can I Stop My Home Foreclosure Today?
If you’re facing down the scary monster that is an impending foreclosure, Property Pals USA has got you covered! We can work with all lenders to navigate the foreclosure. We have created a short sale packet that outlines all of the steps needed to help shorten and ease the process. We will take charge of the complicated side of the process by contacting creditors and getting releases from all of the Trustees.
Our short sale experts will help you through the entire process. We will work to settle with the creditors on your behalf so that you’re not exposed to deficiency. That means we will save you from being taxed on the difference between what you owe and what you settle for!
It is our goal is to take all the stress and extra expenses out of the home selling process. If the thought of navigating all the legalities of selling your house in foreclosure makes you sweat, you have come to the right place.