Wednesday, June 12, 2024
HomeForeclosureOptions When Facing Foreclosure

Options When Facing Foreclosure

Apply For A Loan Modification

Your Options When Faced With Foreclosure

As you may have guessed, a loan modification modifies the terms of your current loan. If you arent eligible to refinance, a loan modification can work similarly in helping to make your monthly payments more affordable, allowing you to stay current on the loan and remain in your home.

A common type of loan modification is extending the length of the loan term so that you have more time to pay off the loan, lowering your monthly payments. This may or may not be used in combination with lowering your rate.

Communicate With Your Lender

If you know that you are going to have trouble making your mortgage payments, contact your lender immediately and let them know you are having financial difficulties. This allows your lender time to work with you to create a plan. Remember, do not stop paying your bills, and do not wait until you cannot make payments before you act. Learn how to talk to your lender about trouble making payments.

Lender Alternatives To Foreclosure

Hope Now, an alliance of mortgage companies and housing counselors, can aid homeowners facing foreclosure. A self-assessment tool will give you an idea whether you might be eligible for help from your lender, and there are direct links to HUD-approved counseling agencies and lenders’ foreclosure-prevention programs.

There are alternatives to foreclosure that your lender might accept. The most attractive option that’ll allow you to keep your home is a loan modification that reduces your monthly payment. A modification can entail lowering the interest rate, changing a loan from an adjustable rate to a fixed rate, extending the term of a loan, or eliminating past-due balances. Another option, forbearance, can temporarily suspend payments, though the amount will likely be tacked on to the end of the loan.If you’re unable to make even reduced payments, and assuming a conventional sale isn’t possible, then it may be best to turn your home over to your lender before a foreclosure is completed. A completed foreclosure can decimate a credit score, which will make it hard not only to purchase another home someday, but not impossible: The foreclosure disappears within 7 years or even less, especially if there are extenuating circumstances.

The more quickly you get steady employment and repair your credit score, the more quickly you’ll be eligible to buy a home again. It also may be difficult to rent a home in the short term, but your HUD counselor may be able to offer help.

Don’t Miss: What Happens After Bankruptcy Chapter 7

Best Schools In Richmond Hill Georgia

It was a rollercoaster ride for academics in 2020, with school districts throughout the nation transferringtheir classes online because of the global pandemic.Numerous school districts will continue online courses, while others will welcome students back to campus.Regardless, homebuyers are shopping for homes in Richmond Hill with dedicated in-homelearning spaces, as well as for homes located within the best school systems for in-person instructionin Richmond Hill.

Selling For Cash Could Be Best


Selling your home is not an easy or short process. Regardless of market conditions, the time it takes for inspections, appraisals, and other administrative steps can be too long when your credit is on the line.

If you lost your job or are dealing with an ugly divorce and just want to wash your hands clean of it, there are people who will buy houses with cash. If youve exhausted all options with your lender and foreclosure is imminent, selling for cash may be your best bet.

The good thing with this option is that these buyers will buy your home as-is, in cash. There is very little hassle and things can be expedited, so you can move on with your life.

This is where Sundae can come in and help. Our specialty is working with buyers who need a little help and want to get the highest price on their home. When you list your home on our marketplace, you dont have to worry about showings or time-consuming processes. Well take care of it. We also offer eligible sellers up to $10,000 in cash advances to help you move and get settled.

Don’t Miss: Can You File Bankruptcy On Traffic Tickets

Hire An Agent For A Short Sale

Another option to consider when trying to sell your house during a foreclosure is hiring an agent who specializes in short sales. A short sale occurs when the bank agrees to accept less than what’s owed on your mortgage, allowing homeowners like yourself to avoid foreclosure altogether. This option can be beneficial for homeowners because it does not show up on their credit reports as a foreclosure if the bank accepts less than what is owed.

Foreclosure Option #: Loan Modification

A loan modification is what it sounds like. It modifies the loan to make it easier to pay. This can be a temporary or permanent modification, and can include a lower interest rate, extended timeline, or other combination.

This is a highly popular foreclosure option. Banks actually would prefer this to taking your home. Think about it, theyre not in the real estate business. Theyre in the money business. Theyd rather have your money, even if a bit late, than a home that some pissed off person has been living in.

Its important to note that this is not the same thing as a refinance. In a refinance youre taking out a new 15 or 30-year loan to pay off your existing loan. With a loan modification, the bank is making adjustments to your interest rate, payoff period or other factors to make it easier for you to pay off the existing loan.

The bank is still gonna get their money. Sometimes there may be temporary relief, but long-term penalties. For example, your monthly payments may drop, but the time period is extendeddo you really want to be paying off your house for another 50 years?

Other modifications might require a balloon payment in a year or two, so loan modification is really just a temporary solution. For someone who has temporary issues paying the mortgage , this might be the best foreclosure option. If you are having trouble paying because you cant manage your money, loan modification is only going to delay the inevitable.

Don’t Miss: When Does A Bankruptcy Come Off Credit

Foreclosure Option # : Apply For Government Assistance

There are lots of programs available to homeowners struggling to pay their mortgage, many put in place as a result of the 2008 mortgage crisis. Most of them apply to specific circumstances, and many are not required of your lender.

In other words, if you find a program that is meant to address your situation, you will still have to ask your bank if they are part of that program.

Another thing to consider is that many of these programs were made specifically to help people during that recession, so some of them have end dates, and require your mortgage to fit specific criteria. For example, many require your mortgage to have been opened prior to 2009.

Getting Help And Advice

Facing Foreclosure | Tips How To Save House From Foreclosure | Avoid Foreclosure in 2021

If youre having a hard time reaching or working with your loan servicer, talk to a certified housing counselor. To find free and legitimate help:

  • Visit gov or the Homeownership Preservation Foundation. Or call the Homeowners Hope Hotline at 1-888-995-HOPE .
  • If you have a mortgage through the Federal Housing Administration or Veterans Administration , contact them. You may have other options instead of foreclosure available to you. Visit the joint site of the Consumer Financial Protection Bureau , Federal Housing Finance Agency , and U. S. Department of Housing and Urban Development . Theyre working together to help homeowners and renters during the coronavirus pandemic and might have other options for you

Housing counseling services usually are free or low cost. A counselor with an agency can

  • answer your questions
  • prioritize your debts
  • help you prepare for discussions with your loan servicer

Scammers may pose as supposed housing counselors and demand an up-front fee or retainer before they help you. Dont pay anyone who charges up-front fees, or who guarantees you a loan modification or other solution to stop foreclosure. Those are signs its a scam.

You May Like: What Is The Most Common Form Of Bankruptcy

Speak With A Professional To Pick The Best Alternative

If you are a month or more behind on your mortgage payments, the lender will initiate foreclosure. They will also issue a 90-Day Pre-Foreclosure Notice, which you will get in the mail.

At this point, you may want to contact some of the foreclosure prevention alternatives detailed above. That way you can speak with someone who can help sort through your finances. A government-approved foreclosure avoidance coach can also facilitate talks with the mortgage lender to help you avoid foreclosure.

What Is The Process For Mortgage Assumption

Most* loans these days have a due on sale clause, which means if you sell the house, the entire mortgage amount is automatically due. There are a few exceptions, such as selling the house to a relative, or as a result of a selling a house in a divorce.

While a bank can technically force you to pay the loan if you sell the house, most of the time, the bank will look the other way as long as the mortgage payments keep coming. Thus, many people will sell the house, not say anything to the bank, and the bank is none the wiser. I dont recommend this, as its risky and simply not necessary.

To keep everything above board, many buyers and sellers will call the bank and explain what they are doing prior to any sale. Depending on the circumstances, the person youre talking to, the size of the bank, and other factors, the bank is likely to give a thumbs up, even if its not officially in writing.

*Certain loans intentionally lack a due on sale clause, notably FHA, VA, and USDA loans.

So where would you go about finding someone to assume your mortgage? The first place Id suggest is family and friends. After that, there are professional investors, like Barker Hill Realty, that specialize in buying foreclosed homes, including through mortgage assumption.

Also Check: Cheap Foreclosure Homes For Sale

Notice Of The Foreclosure

You are entitled to notice of a pending foreclosure no matter which state you live in. If it’s a judicial foreclosure, you’ll get a complaint and summons letting you know that a foreclosure has begun. If it’s a nonjudicial foreclosure, you may receive two notices:

  • Notice of default . Depending on state law, a nonjudicial foreclosure starts when a notice of default is recorded at the county office. The NOD serves as public notice that you are in default. It contains details about the borrowers, lender, trustee, property, default, action required to cure the default, and a statement that if the default is not cured by the stated deadline, the lender will sell the property at a public sale.
  • Notice of sale . The notice of sale might be mailed to you, published in a local newspaper, posted on the property, and recorded in the county land records. It includes details about the property, a statement that the property will be sold at a public auction, and information about the foreclosure sale.
  • If you do not receive an appropriate notice under your state’s laws, you may have a defense against foreclosure. While that does not necessarily mean you could avoid the foreclosure, it may force the servicer to issue a new notice and start the foreclosure process from scratch. That could potentially give you enough time to get caught up on payments or sort out another option. An FDCPA validation notice may be combined with a breach letter.

    Foreclosure Option #16 Do Nothing

    Foreclosure and Your Home: Understanding the Process, Your Rights, and ...

    The default foreclosure option is to do nothing. Just wallow in your own crapulence and let the banks walk all over you. You will lose your home, your credit, and maybe more. I strongly advise against this, and since youre here trying to find options, I assume this doesnt describe you.


    Also Check: What Is Chapter 7 Bankruptcy Definition

    Foreclosure Option #: Refinance

    If youre not too behind on your payments, and you still have your job, the easiest thing is to just refinance your house. If interest rates are much lower than they were when you originally bought the house, your payments might go down significantly.

    Even if mortgage rates are higher, you still might be able to reduce your monthly payments by getting a longer-term loan. This is obviously going to keep you in debt longer, but it will protect your credit and youll get to keep your house.

    This foreclosure option wont work if youve had a life crisis , or your house value has gone down significantly in value. Your new loan has to be enough to cover the total amount of your current loan.

    Ways To Stop A Foreclosure

    Once youve missed 3 or more months of payments and are in default or in preforeclosure, your options for stopping the foreclosure process will depend on how far along you are and what your financial situation looks like. Its best to speak with your service or about options as soon as you know that youre going to miss payments so they can see what they can do to help you get back on track and possibly refinance to avoid foreclosure.

    Read Also: Will Filing Bankruptcy Affect Me Buying A House

    Do I Need A Lawyer For Alternatives To Foreclosure

    Theoretically, you could try to pursue alternatives to foreclosure on your own. However, if you are facing foreclosure, experts recommend contacting a foreclosure attorney. He or she can help you secure a loan modification, forbearance, or repayment plan. He or she can also help with deed in-lieu of foreclosure, and facilitate negotiations with your lender.To learn more about alternatives to foreclosure and how we can help, submit a free consultation form, today.

    Statutory Redemption: Paying Off The Debt After The Foreclosure Sale

    Foreclosure Avoidance Options for VA Homeowners

    In some states, you also have the right to get your home back within a limited amount of time after a foreclosure sale. This right is called the “statutory right of redemption.”

    With statutory redemption, you must pay whatever price the home sold for at the foreclosure sale plus certain lawful expenses, or, in some cases, you have to pay the full amount of the mortgage debt. The laws in your state specify how much you have to pay and how long you have to redeem the property if you get that right.

    Read Also: Can You File Bankruptcy For Free

    Can You Sell Your House If Its In Foreclosure

    Can I sell my house if its in foreclosure? is a common question that we get. Although the bank doesnt technically own your house, the mortgage serves as a lien on the property, which means they can control what you do with the house. Being about to sell your house in foreclosure is a matter of timing and the amount owed relative to the property value.

    Timing: the closer you get to a foreclosure auction, the harder it becomes to sell your house if its in foreclosure. Usually people know that life changes are going to make it difficult to make the mortgage payments. The easiest would be to sell it before you even miss a payment. This will help protect your credit, minimize stress, and frankly, keep the banks completely out of the process. Once you start missing payments, youll get the banks attention. And once the bank begins foreclosure proceedings, youre on the clock and will have until the auction to sell your house.

    Amount owed: the amount owed relative to the property value will also affect whether youll be able to sell your house if its in foreclosure. If your house is worth more than what you owe, its pretty straightforward. Simply find a real estate agent and sell the house. The bank wont ever be involved. If you owe more than the house is worth, things get more complicated. Youll have to get permission from the bank to do a short sale, since you wont be able to pay the mortgage back in full.

    Facing Foreclosure Understand Your Options

    Were long past our 2020 business plans now. These are strange times for business owners and operators, and if youre finding yourself in a situation that you wouldnt have imagined possible six months ago, youre not the only one. A common issue were seeing a lot of people facing right now is the threat of foreclosure. Even with PPP loans and small business assistance, its sometimes just not enough to cover both salaries and rent.

    If your business is on the edge of foreclosuredont panic. Here are a few steps that you can take to stave off or avoid foreclosure on your business property:

    Read Also: Is It Better To Settle Debt Or File Bankruptcy

    Forbearance Agreements And Repayment Plans

    If you believe that your financial troubles will resolve in the near future, you can try to negotiate a forbearance agreement with the lender. This means that the lender will agree not to collect monthly payments from you or to collect reduced payments during a certain period, which is usually several months. You will need to catch up with these payments eventually, but this can help you save your home until your situation improves. Also, you can negotiate a repayment plan with the lender that allows you to catch up with payments that you have already missed based on a temporary hardship. The lender will add a percentage of the overdue amount to each of your monthly payments for a certain time.

    Lenders will usually be very willing to negotiate an alternative to foreclosure with a homeowner, since many alternatives are easier to manage than the foreclosure process.


    Popular Articles