If you’re facing foreclosure, there's only one of a few options you have to get out of it. Methods of stopping foreclosure are either filing for bankruptcy - which you should try to avoid; negotiate with the lender to get payments caught up - and be able to maintain them going forward; sell your property, especially if you have equity in it and can arrange with lenders for time to make the sale happen; or when warranted, arrange for a short sale of your property negotiating the sales terms with your lender(s).
However, I want to make it clear that I cannot, nor can anyone else, do anything for you if you have let too much time pass since receiving your first foreclosure statement from the lender and haven't contacted them. You Cannot Have Ignored These Notifications! It is paramount that you contact them before making a payment is an issue, or immediately after being notified, to initiate a possible payment deferment or other resolution plan with them.
I understand that facing a home foreclosure is one of the most devastating life occurrences that can happen to you. I've witnessed it happen to families for a number of reasons such as loss of job or income source, medical and/or mental health issues, addictions, grief, divorce or a combination thereof. It's somewhat understandable when you witness people who tend to just "give up" from being overwhelmed from these problems.
You don't need this added major life issue to compound whatever other life crisis you are currently having. If this is you, then obviously I'm telling you to never give up! No problem is permanent and life isn't so short that you can't get back on your feet or put your family in a more stable situation if you persevere. Your foreclosure situation may not be so hopeless to deal with as you may feel - provided you HAVE NOT IGNORED your foreclosure notices!
When a homeowner falls behind on their mortgage payments, standard practice is to receive a foreclosure notice within the first month of "default". However, depending on the lender and for reasons unknown, I've seen initial notices sent several months into non-payment of a mortgage. Negotiating with the lender at that point becomes a bigger challenge as the homeowner is probably also several months behind on their payments and both parties know it. Again, it would be prudent to be proactive in contacting them without their notice when you know you can't make a payment.
The bottom line is, this is your first step no matter what towards a resolution. If you've immediately contacted your lender about your situation and you've managed to buy time through negotiation, or haven't been offered a viable repayment plan from them, then let's talk. Yes, bankruptcy is one of your options and you'll probably know if this is your only recourse, but let's talk about your other two possibilities - selling your home or arranging for a short sale.
Stopping Foreclosure
Sell Your Home
Most lenders want to avoid the hassle of dealing with properties put back in their possession from a foreclosure. Once a foreclosure possibility presents itself, they typically want to be included in how it is resolved afterwards. Foreclosure scenarios vary, but it starts with my helping you to negotiate with the lender to buy time, if needed, to get your home sold.
Having enough equity in your home at the time of a foreclosure is important here. You may be in a scenario where you have already made payment arrangements with your lender, but not feeling stable about your continuing income and considering getting out from under the home by selling it.
For instance, I have helped a single mom struggling with a contentious divorce and reduced income where she was fearful of being able to continue paying her mortgage. We were able to sell her home in time with enough funds leftover from the sale for her to move closer to where she had support from her extended family and the monetary means to start over.
Saving your credit is also a crucial aspect to keep in mind. Your situation may change for the better quicker than you think. You'll want to avoid having a foreclosure on your credit that will create a challenge towards purchasing another home sooner.
You get the idea. Viable foreclosure home sale situations are not common, but I have assisted past foreclosure-facing clients get their home sold quickly allowing for them to to get a fresh start again. They've walked away with money in their pocket from the sale and prevented further damage to their credit rating in the process.
If you think you are still in a position to be able to put yourself in a safer or more viable financial situation for yourself and/or your family through selling your home, contact me to see how I can help make it happen.
Short Sales
A short sale is a transaction in which the lender, or lenders, agree to accept less than the mortgage amount owed by the homeowner. In some cases, the sale difference is forgiven by the lender. In others, the homeowner must make arrangements with the lender to settle the remaining debt after the sale.
A short sale isn't a solution tied specifically to resolving a foreclosure. They can be the best option for homeowners who have to, for instance from being transferred to a new job in another area, sell their house at a given time where housing prices have drastically decreased and renting the property out is not an option. In other words, they are “upside down” on their mortgage where the current market value of their home is less than what they purchased it for and/or their current mortgage balance is higher than the current housing market values.
Of course, a threat of foreclosure forces the homeowner to act immediately to resolve their problem, but the housing market at that time isn't in their favor creating a short sale scenario.
The good news is, a short sale is a preferable means for a lender to minimize their losses over having foreclosures, so they are typically open to your pursuing this avenue through negotiating sale terms.
However, a short sale is a notoriously lengthy process as you are dealing directly with the bank holding the note. They're not like traditional real estate transactions that move along faster with motivated parties. Banks operate at their own pace and they can create communication bottle-necks trying to get decisions made in a timely manner to complete the sale. You won't find real estate agents running towards short sale transactions because of it. Most don't mention it in their marketing.
Another positive... when it comes to saving your credit rating, a short sale doesn't hurt your credit history as much as home foreclosures. Thus, this helps to qualify for another mortgage sooner once you get back on your feet financially.
I'm Can Only Help Those Who Can Also Help Themselves
I live by and have built my reputation with the slogan “Putting Clients First”. Although working with investors is also part of what I do, my focus here is only to discuss helping you sell your home before the foreclosure – if there’s still time – or assist in setting up a short sale under the role of your REALTOR®.
I'll be your best advocate to help get you out of your situation. However, call me only if you are motivated or perceive you are still in a position to be able to help yourself start over as it will take the both of us working together to make things happen.