The idea of your home going into foreclosure is not something homeowners want to think about. Unfortunately, though, that is the reality for some.
Foreclosure means the homeowner failed to keep up with their mortgage payments and now your lender is taking procession. Lots of times you will see the home abandoned. Other situations the homeowner gives the deed of the house voluntarily to the bank. Either way, the lender is seizing the property and foreclosing the loan due to no payments coming in.
Typically the foreclosure process begins after three missed mortgage payments. The result, besides losing your home, is multiple fees during the process and taking a massive hit to your credit score. The lender would then sell the house to pay off what you still owed. You’ll likely find your home in places like Queens foreclosures that other people can buy.
There are ways to stop the foreclosure processes, although you cannot guarantee you will still get to keep your house. Here are a few of those ways.
Refinance Your Mortgage
If you find it is a struggle to keep up with your mortgage payments, or maybe you suddenly fell ill or lost your job, you can apply to refinance your mortgage. This method would make your payments more affordable. But you will need to show that you can keep up with the new terms.
However, if you do not speak with your lender and just miss your mortgage payments, the refinancing option is likely to go out the window. You would then be given a 60-day late and a 90-day late notice
Short Sale
The period between the lending filing for a Notice of Default (NOD) and putting your house up for auction, you have time to perform a short sale. The lender is selling the house to cover what you still owed on your mortgage.
A short sale would mean you found a buyer for them. So during this period, seek out a serious buyer for your house that you can present to our lender. This isn’t a sure method. The lender needs to agree on the short sale. So prepare a pitch as to why the lender should agree on your proposed short sale.
File for Bankruptcy
If you file for bankruptcy, it will immediately stop a foreclosure. Bankruptcy means anyone collection money from you must end. Because foreclosure is looked at as a collection activity, the processes must freeze immediately.
Don’t think that bankruptcy is an easy way out. It buys you some time, but you do have to go to court for this. It also doesn’t let you off the hook of any debt you owe. You are still responsible for paying everything. The difference now is the lenders are to work with you to set you up in a way that allows you to make your payments.
The foreclosure process does not show up out of anywhere. You will receive warnings of late payments before the process begins. But if you cannot get yourself on track, these are a few options that could help.
