It’s not always your fault, maybe you lost a job, or even worst a spouse passes away that causes financial hardship. There are many reasons people end up facing foreclosure. We know because we have helped families facing foreclosure figure out their next best steps. No one has the right to sit in judgment of another person’s misfortune.
When You’re Facing Foreclosure-Time Moves Fast.
It’s like being up to bat with two strikes against you, and it’s the bottom of the ninth ending, and low and behold, what does the bank do, they throw you a curve ball. Just when you think you may have figured out a way to save your home, the bank stops talking to you.
The process doesn’t always work out for the people who need it most, and that’s an unfortunate truth.
But if you don’t pay your mortgage, as challenging as it might be, you will lose your home in a foreclosure.
Which means your kids may have to change schools, your poor credit will make it harder to find a decent place to relocate, and you still have to deal with collection agency’s who won’t stop calling, and frankly, who act as if you borrowed money from the guy who’s been leaving you threating messages.
I don’t know your situation. However, I do know from experience that information like this can be helpful as you make decisions going forward. What do the hedge funds have that most people don’t? They have access to cash when they need it.
They also have friends on Wall Street where they work and live to help them when they need it.
Friendly-House-Buyers exist to help the people who live on “main street” and who need access to cash when they want to sell their homes. We can even help you start over when you’re ready to buy again.
The Good News! There’s A Pre-Foreclosure Process That Has To Be Followed By Your Lender
Thankfully, banks are required to give you a grace period. Known as the “pre-foreclosure period,” this time extends from your first notice of default to the final day of the sale of your property on the court house steps. During this period, your lender will usually make several attempts to communicate with you to give you an opportunity to explain why you have missed payments. Depending on the circumstances, the bank might let you explore a loan modification program to get caught up on your mortgage.
In Texas, the pre-foreclosure period is one of the shortest in the country and is usually completed in three months.
The pre-foreclosure period gives you a chance to sell your home before the foreclosure date, or find another solution to stop the foreclosure process. If you’re struggling to make your mortgage payments, then you probably haven’t been keeping up with the deferred maintenance on your home. Moreover, who can blame you, maintaining a roof over your head is more important than repairing a broken window. However, a house that needs deferred maintenance will have to be sold at a discount to market value, assuming you can get a price that pays off your mortgage balance, you may still walk away with a little extra cash.
Considerations If You Are Working With The Bank
It is very common for people to feel “stuck” after getting a notice of default from the bank. Many homeowners assume foreclosure is a foregone conclusion and that the bank will take their property. In reality, the bank just wants to be repaid its debt. If you can figure out an alternative to satisfy your financial obligation, all ends well.
If you have a traditional, government-backed mortgage (typically any 30-year fixed rate mortgage), you might have to meet special conditions before completing a pre-foreclosure sale with a realtor. Some of these requirements include:
Your home must be owner-occupied, not an investment property and not a home you have already abandon.
There are several ways to sell your house before your foreclosure date. The fastest way to sell your house before foreclosure is to price it at a discount to market value (but still enough to pay off the mortgage) to attract cash house buyer’s quickly.
Another option is to sell via short sale, a situation that occurs when you owe more on the mortgage than the home is worth. The word “underwater” during the recession referred to homes that had mortgage balances higher than their appraised values. It’s more appropriate to say the banks were “underwater,” and consumers were “drowning in debt.” Even so, your lender will have to agree to the short sale price, and the price will depend on how much your bank is willing to take in losses.
There are some advantages to selling your home while in pre-foreclosure. The main advantage, of course, is it helps you avoid foreclosure. When you lose your home to foreclosure, it has a devastating impact on your credit score for up to seven years! Selling in pre-foreclosure helps to protect your credit score and improves your ability to get a loan in the future (for a house, car or otherwise).
Another reason to sell in pre-foreclosure is to avoid a “deficiency judgment” – a/k/a the difference between the sales price and the amount you owed. So, in addition to the foreclosure ruining your credit, you might get stuck taking on additional debt.
You’re Not Alone!
If you have questions, or would like to get a “cash contract” offer on your home, call or email us for a confidential review. Just remember your problem is solvable, but you cannot wait until the last minute to start building a team to help you.
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