| Foreclosure is the process that mortgage companies | | | | waiting for an offer is not the best approach because |
| use to try to recover the delinquent loans. The lenders | | | | you will lose the valuable time, and very few Realtors |
| do not want houses or any other real estate instead | | | | know the short sale process. Local home buyers such |
| of money. They want the mortgages paid off and the | | | | as investors, who specialize in buying houses fast, |
| mortgage payments current. | | | | might be a better solution. Usually they charge you |
| If you have suffered a financial setback, there is a | | | | nothing to purchase your home and the bank does not |
| great chance that you would like to prevent | | | | have to go through the foreclosure process. |
| foreclosure and keep your home. Most of the | | | | - Loan modification or forbearance agreement is |
| homeowners in such situations think that they cannot | | | | re-negotiation of the terms with your mortgage |
| save a home and have to ruin their credit, lose home | | | | company. You can go back your lender and ask to |
| and be put out on the street. | | | | modify or restructure your loan. Some lenders will |
| You can stop Foreclosure and save your home. | | | | work with you and modify your loan by adding your |
| However, you cannot delay another day, you need to | | | | back payments to the end of the existing loan principal, |
| act now. In most cases the home owners wait just | | | | changing the interest rate or extending the term of the |
| too long, and the house has too much debt, late | | | | loan. You need remember, that the lender will not |
| payments, fees, etc. and even investors cannot buy | | | | forgive the back payments - earlier or later you will |
| houses because the upfront cost (e.g. to catch up | | | | need to pay these off. Also, in most cases the monthly |
| your payments) is very high. For example, a short sale, | | | | payments will increase as a result of the spread out |
| in this case, might be an option, where an investor | | | | back payments, so make sure you can afford the |
| negotiates with the bank to purchase the house at a | | | | new monthly mortgage payments. |
| discount. Though it is a time consuming process, which | | | | - Pre-foreclosure sale / fast house sale will usually |
| would not save your credit and would not harm as | | | | allow you to sell your house before you lender sells |
| much as foreclosure, it will stop the foreclosure | | | | you home at a public auction. You may want to check |
| process. | | | | on the timelines in your state, how much time you have |
| Here are some of your options (most realistic): | | | | before the auction date. If you can sell you house |
| - Doing nothing and going into foreclosure. That is right, | | | | before the lender takes it then do it, even if it means |
| do nothing, hope for the best and get foreclosed by | | | | that you will walk way only with the mortgage balance |
| the bank. This is not the end yet, you will lose your | | | | to cover the loan. Some real estate agents can work |
| home, get your credit ruined (the credit score can drop | | | | with you on selling your house and try finding you a |
| by 100-150 points for being late on the mortgage for | | | | buyer, but it may take more time because agents can |
| couple months ), you home will be sold to the highest | | | | work mostly with buyers that can qualify for a loan. |
| bidder at a public auction, you will be evicted by a new | | | | Real Estate investors might be a better option in this |
| owner will have to start everything from scratch, NO | | | | case as they usually have funds ready to buy houses |
| BANK will work with you for a number of years after | | | | or work out another plan to stop your foreclosure |
| the Foreclosure. So think really well before letting the | | | | process. Investors will buy your house As Is and in |
| mortgage company to foreclose on your house. Do | | | | most cases they are able to close quickly, sometimes |
| something, anything... just to avoid going into | | | | in couple days, if necessary. You will win buy selling |
| foreclosure. | | | | your house quickly, but you will have to take a loss and |
| - Refinancing. You can refinance the existing loan with | | | | often times settle for a mortgage balance (you should |
| the current or a different lender. You would need to do | | | | try to get your mortgage balance covered) either by |
| the research on the terms and find a lender that has | | | | getting a new loan and paying yours off or by taking |
| most attractive terms. This would involve you | | | | over payments on the existing mortgage until that |
| negotiating with a lender and filling out new paperwork. | | | | investor sells the house or refinances on the house. In |
| Be aware though of adjustable rate mortgages. If you | | | | any case, you will win because the foreclosure |
| got in trouble one time because of the adjusted rate | | | | process will be stopped, you will save your credit and |
| on your mortgage, don't fall into the same trap again. | | | | you will be able to move on with your life. |
| Fixed rate mortgages are your best bet. | | | | You need to choose an option that is best for your |
| - Bankruptcy. Believe it or not, some choose to file | | | | situation. For example, if you know that you cannot |
| Chapter 7 or Chapter 13 bankruptcy to avoid the | | | | afford the house, the payments are too high, you |
| Foreclosure. The truth is, there is no guarantee that | | | | cannot choose loan modification as this option may not |
| Bankruptcy will stop Foreclosure. Bankruptcy may | | | | help you to lower the monthly payments, but often |
| prolong the foreclosure and buy you more time; | | | | times monthly payment might temporarily increase until |
| foreclosure proceedings can be temporarily | | | | you get current on mortgage payments. Similarly, a |
| suspended. However, the mortgage company can | | | | short sale might not be a good option if you do not |
| apply to the court for relief from the automatic stay, | | | | know how to negotiate with a lender to accept less |
| the order preventing creditor action by virtue of the | | | | than what is owed on your mortgage or if you're want |
| bankruptcy. IF you get lucky, you may have all your | | | | to get your equity. |
| debts wiped out completely, but in most cases, you | | | | Therefore, you need to know what you are trying to |
| would still need to repay past due amount and to | | | | achieve and choose an option that best suites your |
| negotiate with your mortgage company to keep your | | | | needs. Options like doing nothing, filing a bankruptcy or |
| home. Therefore, your circumstances must be well | | | | a short sale will not save your credit. But if you are |
| suited for this option as you might end up in worse | | | | about to fall behind or you are already couple months |
| position that when you started. This option should | | | | behind on payments, your best alternative is to sell the |
| come only as a last resort. | | | | house as soon as possible and avoid or stop the |
| - Short sale is the sale of real estate when a lender is | | | | foreclosure if the lender has already started the |
| willing to accepts a loss - less than what to you owe | | | | process. |
| on your mortgage. If there is no equity in your home to | | | | BUT, DON'T JUST SIT and DO NOTHING... DO |
| pay commission, closing costs in order to sell it or pay | | | | SOMETHING... |
| off your mortgage, then you might consider this option. | | | | If you're really serious about avoiding foreclosure, even |
| However, this is a very time consuming and | | | | if your home needs work, even if there is no equity in |
| complicated process and your property can be sold | | | | the house, even if you owe more than it is worth, even |
| only to a so called cash buyer. Therefore, you should | | | | if you think that everything is hopeless and you have |
| not be completing a short sale on your own, but be | | | | no money to spend, or if you are falling behind on |
| better off if you hire a professional who has | | | | payments... Stop and think again. You have options. |
| experience in short sales. Listing your house and | | | | You just need to start acting today. |