Knowledge

Stopping Foreclosure – Last Minute Strategies

Did you recently lose your job or get laid off? Have you been struggling to make your house or mortgage payments? Maybe you have received a notice of foreclosure if you don’t take immediate action.

File for Bankruptcy:

If your home is for sale and set to foreclose in the next few days, the first and most effective thing you can do to stop the foreclosure is to file for Bankruptcy. This will immediately halt the sale of your home. Chapter 13 Bankruptcy often works best for halting the sale of your home. Chapter 13 allows you to repay missed payments, using a payment plan, which also allows you to get back on track. Chapter 7 bankruptcy is even more helpful, because it can help you become debt free before get in too deep, so you can continue to make mortgage payments.

After you declare Chapter 13 bankruptcy an automatic stay will be put into effect, which prevents the mortgage lender from taking your home or collecting on further debts. Essentially, any and all activity on the foreclosure process will be halted when Chapter 13 bankruptcy is filed.

* Always consult with an attorney, we are not attorneys and this does not constitute as legal advice.

When a Lender Files for Relief from the Stay

A relief from stay is not a good thing for an owner in the process of foreclosure. When a lender files for relief from stay, the lender is trying to get the bankruptcy reversed and the court to go through with the foreclosure.

However, even if the lender’s petition is granted, it usually takes a few months to get the bankruptcy reversed and to continue with the foreclosure sale. Even if the courts reverse the bankruptcy, keep in mind that there are other options.

Loan Modification

This is not something that should be a last minute save option, but it can be if it is absolutely necessary. This works best if the lender is restricted from dual tracking. However, if your loan modification is approved, the foreclosure will be permanently stopped, as long as you continue to make modified payments. However, in the last few years three states, California, Nevada and Minnesota have passed a Homeowner Bill of Rights, making dual tracking prohibited. For those not familiar with lending or bankruptcy term, dual tracking occurs when the lender proceeds with the foreclosure while a loss mitigation application is pending.

Government Aid

The Obama administration has created a number of new programs to help the American people avoid foreclosure. Which of these programs is the best for you? Let’s find out.

HAMP – Home Affordable Modification Program – HAMP aims to lower your mortgage payment to 31% of your gross monthly income. Homeowners report an average of 40% decrease in mortgage payments with as many as 18% saving at least $1,000 each month.
Principal Reduction Alternative – This relief program was built specifically to help those whose homes are worth a lot less than they owe. It encourages lenders to reduce the amount of debt still owed on the home.
FHA Special Forbearance – Available to only the unemployed or those with no source of income, this special program works by offering a temporary reduction or suspension of a mortgage. This type of forbearance can last up to 12 months.
Other Foreclosure Alternatives – If foreclosure seems imminent because you cannot find a way to make payments, you have other option. Short sale or deed-in-lieu of foreclosure through HAFA SM.
Redemption – Your last hope is to be able to redeem the sale of your home — post-foreclosure. To do this, you will need to pay the remaining balance owed on your mortgage as well as any additional fees incurred during the foreclosure process.

* Please check the government’s website for current and up to date programs, as they tend to change.

Federal Housing Administration

If you are a homeowner with an insurance policy from FHA there are a lot of informational resources to help you. FHA also have staff available to assist you if you are facing financial hardship or unemployment. There are also those who can contact lenders and negotiate on your behalf, or even help you file a lawsuit. You will only win the lawsuit however, if you can prove that the lender carrying out the foreclosure should not take place because of one of the following

cannot prove it owns the promissory note
did not act in compliance with state mediation requirements
violated the state’s Homeowner Bill of Rights
did not follow all of the required steps in the foreclosure process (as determined by state law), or
made some other grievous error

Keep in mind, however, that when you file a lawsuit you will most likely end up more in debt and still have to foreclose on your home. Sell your house cash to us to remove the burden.

Homeowners that have fallen behind on their mortgage usually don’t know where to go for help or even where to start. They never planned on getting into this position, but this is where they are and it is something that needs to be dealt with. There are typically extenuating circumstances that cause homeowners to fall behind:

– Job loss or unexpected unemployment
– Illness or sudden medical emergency
– Divorce
– Death in family
– Loss of income through demotion or pay cuts
– Adjustable rate payment becomes too high

How To Stop Foreclosure

If your lender has filed a Notice of Default your options will now be limited. This is why it is always smart to call your lender when you know you will be behind on payments. Since foreclosure proceedings have started; the bank starts incurring more fees that make it more difficult to get out of the situation.

The period that they give you to make your payments current and pay any costs of filing the foreclosure and for stopping the foreclosure is called the reinstatement period. If you have not been able to reinstate your loan these are a few of your other options:

Sell Your Home

This is where we come in. We have the ability to close on a house within 5 days. Our in-house team of attorneys, title companies, and contractors work with a synergy that is unsurpassed by competitors. Sellers will often call us 1-4 weeks before their foreclosure date and need to be sure we can close on the property. We get it done. We make it simple.

Don’t let the bank foreclose on your property, call us NOW to preserve what equity you have and give yourself the ability to move on with some money in your pocket. Don’t let the bank take it.

*Note, not all homeowners will have positive equity in their home, in most cases they are upside down, meaning they owe more than the property is worth. Call us, we may still be able to help.

Consider a Short Sale

If you owe more than what your home is worth, you might want to consider doing a short sale on your property. It’s a much better option than letting your property go to foreclosure, and sometimes the bank will give you money for relocation costs. A short sale will affect your credit but not nearly as bad as a foreclosure. We have a seasoned team of short sale negotiators we work with and if you are considering a short sale we can put you in contact with someone who can help.

Deed-in-Lieu of Foreclosure

Also known as deeding the house back to the lender. This is where the deed is signed back to the bank and the lender forgives the mortgage. Typically your credit will be affected the same as a foreclosure.