Worried About Foreclosure? You Have Options!
If your bank has recently filed a foreclosure notice, you may be wondering about your options. Every case is different, but here are a few of the choices available to you.
Option 1: Loan Forbearance or Modification - One strategy worth pursuing is called a loan forbearance. The loss mitigation department of your mortgage company may make arrangements with you to pay some of the back payments now and the balance within a certain time period. For example, if you owe $9,000 in back payments, attorney fees, etc., your mortgage company may accept $4,500 now and $750 per month for the next 6 months. This is in addition to making your normal monthly payments.
Unfortunately, loan modification or forbearance is easier to arrange before the foreclosure action has been filed. Some lenders will not consider this after filing, but it's worth a try.
Option 2: Reinstate Your Mortgage - You have up to and including the morning of the auction to catch up your payments. You may be able to borrow from friends or family, credit cards or retirement program. You might even be able to arrange a second mortgage to catch up the back payments and fees. Check in the Yellow Pages under "Mortgages." There are a number of companies that may be able to help you.
Option 3: Refinance - The fact is it is very difficult to arrange new financing when you are in default on your existing mortgage. Arranging new financing will depend on your income, credit report, value of your home and the amount of your equity. If you're not sure of the value of your home, contact me for an estimate. Of course, there's no obligation.
If you do attempt to refinance, you should have a backup plan in case the refinance does not go through, and make sure you are working with a reputable lender.
Option 4: Sell Your Home on the Open Market This is where I come in. Selling your home may be one of the best options available to you. Depending on the value of your home, it may be the only option that can put money in your pocket, as well as being the first step to repairing your credit rating and financial health. Although the market has slowed in recent months, there is still a good market for well-priced homes that are in good condition, and I am a specialist in helping homeowners put their homes into the kind of condition that will result in a fast sale. Your home may be worth more than you think!
If this option interests you, please contact me as soon as possible to find out how I can help, or visit my Listing Service Package page to learn more.
Option 5: Chapter 13 Bankruptcy Nobody wants to file for bankruptcy, but it may be a viable alternative to stop the sale of your home if all other attempts fail. If you feel as though you have the income to immediately begin repayment of all your debts and the courts agree, this may be a way for you to save your home.
If you're thinking of filing for bankruptcy, it's important to discuss your situation with a bankruptcy attorney. Bankruptcy is a complex arrangement that may not be the right solution in every situation.
Option 6: Let Your Home Be Sold On the Courthouse Steps This is, by far, the worst option available to you. Many people feel "I have no equity, let the bank take it", but homes that are sold on the courthouse steps often sell for considerably less than their fair market value. Moreover, if your lender suffers a loss due to the pending foreclosure action against you, they can file a deficiency judgment against you and pursue you for the amount of their loss even after you are no longer in possession of the home.
Don't procrastinate; explore all the options available to you. If you decide to sell, you should act as quickly as possible. It usually takes about 60 to 90 days from the filing of a foreclosure notice until the actual sale. If you act quickly, this should be enough time to sell and close on your home, as long as it is priced correctly and there are no unforeseen circumstances. I can't promise that selling your home will be easy, but I can promise that I will treat you fairly, with dignity and complete honesty. And I will do the best I can to help you minimize the negative impact to your credit and get you on the road to financial recovery.
I hope this information has been helpful, and I hope you will not hesitate to contact me with any questions. The sooner you act, the sooner we can discover the right solution for you.