Steps to Avoid/ Manage the Foreclosure Process
If you are a homeowner that is having trouble making mortgage payments or have not paid the taxes on your home you may feel stuck, ashamed and ashamed. Many homeowners do not want to discuss the facts that got them into this situation and procrastinate taking care of the situation that do not want to address. When they think about the time that they purchased this home for their family to live in, celebrate holidays and watching their children grow up, going into foreclosure was probably the last thing they thought would happen. As life goes on, issues arise, whether it’s a loss of a job, divorce, death in the family or bad investments there are a number of circumstances that could put you and your family in this situation. Few homeowners actually know what to do when they find themselves in this situation but the good news is, there are steps you can take to minimize or avoid the repercussions of a foreclosure.
When you find yourself in a situation of foreclosure, it is imperative that you begin to address the situation as quickly as possible. The sooner you accept the situation, the better chance you have to keep your home. The best way to avoid foreclosure is to prevent your lender from sending a notice of default. Here are some steps that you can take to help your chances at beating foreclosure.
1) Know you’re not going to be able to make mortgage payments: If you know that you will not be able to make your mortgage payments, then your first course of action should be to contact your lender immediately. You have to remember that lenders do not want to foreclose on you because the foreclosure process is expensive and they are now placed with the liability of getting rid of the home (added debt for the banks). Do not be embarrassed or put handling this situation off. The sooner you take responsibility and action on the matter, the sooner you will be able to resolve this hassle. Make sure that you respond to all of your lenders emails and phone calls because if your lender does not hear from you, they are more likely to the process from just an NOD (notice of default) to the foreclosure process. Provide the necessary information that your lender requests and be sure to make copies and document all paperwork throughout the process. Here are some options that your lender may propose:
Give you time to make up your payments
Forgiving a Payment
Spread out the missed payments over a longer period of time
Changing the terms of your loan
Add the back payments your loan balance
Make a separate loan for you
Now all of their options are possible but they will depend on your equity position and also how fast you act to contact your lender.
Once your lender files for a Notice of Default, your options become more limited. This is why it is very important to make contact with your lender before falling behind on your mortgage payments. Once the default is filed, you will usually have a certain time period to bring the payments current, pay the fees and stop the foreclosure process. Here are a few other options to stop the forclosure process after a NOD has been filled:
2) Sell Your Home: You can either go the conventional route and try and list your home for sale through a real estate brokerage or you can turn to investors to sell your Syracuse home. Depending on how much equity you have in your home will determine which route you turn to. If you have a lot of equity in the home, getting an immediate sale from an investor may be your best option.
3) Consider a Short Sale: This goes along with option #2, but your home is worth less than loan balance of your home, you will have to sell your home by a Short Sale. A short sale will affect your credit but it will not be as significant as a foreclosure. In this situation, you want to contact a real estate agent and see what they say you will be able to sell your home for. If the home is worth less than the balance on the loan, you and your agent will have to work with your lender to see if they will be willing to cooperate on a short sale.
4) Sign a deed: in - lieu of foreclosure: In this situation you will be deeding the property back over to the lender. The homeowner will give the lender a properly organized and notarized deed so the lender can forgive your mortgage payment. This will effectively cancel the foreclosure process. You may be able to arrange with the lender an option of allowing you to stay in the home until you find a new place to stay.
5) Leave the property: This option will not forgive you of foreclosure and should be the last of your options. Here you can figure out where you are going move your family, get all your belongings together. Just know that you will be hit with a foreclosure on your credit report.
Conclusion: The main takeaway from this post is that you should immediately take action. Contact your lender once you know that you will not be able to make your mortgage payments. The sooner you contact your lender, the more options you will have for you and your family. If you do wait until you receive an NOD, you also need to act promptly and figure out which resolution will work best. Go through your options, contact a good real estate agent and discuss your situation with them. If you need to act through a Short Sale, be sure you get in touch with a Short Sale agent, somebody who has dealt with banks and knows how to communicate with them. I hope these steps will help you act and take the proper action to resolve this matter.