Homeowners: The Pros and Cons of Pre-Foreclosure Sales

Homeowners: The Pros and Cons of Pre-Foreclosure Sales

Are you a homeowner who is facing foreclosure? If so, know that just because foreclosure is down the road, it doesn’t mean that you have to travel that far. You should know that you do have a number of different options. One of those options starts in the pre-foreclosure stages and is known as a pre-foreclosure sale.

As for what a pre-closure sale it, it is when the home is sold before foreclosure. Often times, it is immediately before a foreclosure auction is set to take place. As for why some homeowners wait so long, they are looking for a reprieve from the lender. Unfortunately, those in poor financial standing are unlikely to get that reprieve. That is why all homeowners should familiarize themselves with pre-foreclosure sales.

As previously stated, not all homeowners are able to receive assistance from their lender. If you find yourself in this position, a pre-foreclosure sale may be the only way to keep your credit in good standing. A foreclosure can negatively impact your credit for years to come. In keeping with credit, some lawyers will have their clients declare bankruptcy to stop foreclosure or hang onto the home. This is also risky.

If you make the decision to sell your home, it is a wise to make arrangements with your lender. A financial lender who knows that you are actively trying to sell your home is more likely to give you time to allow that sale to take place. As for that sale, it can be handled by you or by a realtor. If you are upset about the loss of your home, a realtor is advised. This is because it can be difficult dealing with prospective buyers who seem to have no regard for you or your troubles.

If you use the services of a realtor to help with the sale of your home, you may receive more money. This is because retailers tend to sell homes at or around their assessment value. Although not much may be left over, after paying your mortgage and the realtor, it may be enough to help you make new living arrangements. Since buying a home likely isn’t an option, you should have enough for a security deposit and first and last months rent.

As it was previously stated, buyers interested in pre-foreclosure sales aren’t always careful with the words they choose. You may have to deal with people who look down on you. Yes, they are usually in the wrong, but you must handle the situation calmly. Unfortunately, there are many misconceptions that surround those facing foreclosure, most of which are not true. Remember to always keep your head held high. As painful as it may be to deal with a “jerk,” at least you can avoid foreclosure and keep your credit in good standing.

Perhaps, the biggest downside to selling your home, through a pre-foreclosure sale, is the loss of your home. In fact, this is why many homeowners wait until the last minute to okay the sale of their home. It is a decision that many homeowners are uncertain about. Please know that unless you can get your mortgage back to good standing, you will lose your home regardless. A pre-foreclosure sale at least lets you retain a decent credit score, as your mortgage will be paid off and hopefully in full.

Homeowners: What You Need to Know About Foreclosures

Are you a homeowner who is facing foreclosure? Even if you aren’t facing foreclosure yet, are you suffering from financial difficulties that may result in it? If so, now is the time to familiarize yourself with the process. Foreclosure can be scary for homeowners, but you can protect yourself by knowing what will happen, what you can do, and what your rights are.

Mortgage lenders, which are often banks, must and will provide you with proper notice. In fact, you will receive multiple written notices and telephone calls. Foreclosure should not come as a surprise to you. Neither should the eviction notice that may later arrive. As soon as you start receiving calls or letters from your financial lender, it is important to take action. As for what action you should take, that leads to another important fact.

Banks want to avoid foreclosure just as much as you do. Unfortunately, many homeowners are actually surprised to learn this. Many times, financial lenders lose money when selling a foreclosed property. For that reason, you should speak directly with your financial lender. When doing so, have this meeting in person and meet with a high-ranking official, such as the chief loan offer or the branch’s president.

Since banks want to avoid foreclosure whenever possible, it is important to go into detail about your financial situation. Are you only experiencing temporary problems? For example, did you suffer an injury that will put you out of work for a few months? Were you laid off, but are you actively looking for a job now? If so, your financial lender may be willing to work with you. If you can prove that you have intent to get your mortgage back in good standing, your lender may temporarily accept smaller payments.

As for the foreclosure proceedings themselves, the process will all depend on the state in which you reside. Unfortunately, this is a fact that many facing foreclosure do not know or do not take into consideration. If you intend to seek professional help, from either a housing counselor or an attorney, it is important you choose a professional who is familiar with your state’s laws on foreclosure, as they do vary.

For example, in New York, judicial and non-judicial foreclosures are permitted by law. A judicial foreclosure is where the lender must file an official complaint against the borrower, which would be you. This complaint must be approved by the local courts. A this point in time, the borrower may be given one more opportunity to pay the amount in delinquency. If not, the property will be sold.

As for non-judicial foreclosures, financial lenders must have entered a specific clause in the mortgage agreement. This clause states that the borrower, which would be you, authorizes the sale of the property when delinquency occurs on payment. Typically, non-judicial foreclosures are not used often and some states even prohibit them. That is why it is important to know all of your state’s foreclosure laws.

When the foreclosure process has started, now is the time that you should start looking for other arrangements. Unless you can come into a large amount of cash and rebuy your home, you best option may be to move. Although you are not required to leave your home until you are served an eviction notice by the lender or new property owner, it is a process that you should start planning and preparing for. Where do you want to live? If you will rent an apartment, how do you intend to pay for the security deposit? These are questions that you need to have answers to.

As a recap, foreclosure laws vary by state, banks want to avoid foreclosure and multiple notices will be sent. For that reason, foreclosure should never come as a surprise. For more information on foreclosures, contact a HUD (United States Department of Housing and Urban Development) approved counselor, your lender, or an attorney, but do so right away.

Homeowners: Your Foreclosure Options Reviewed

Are you a homeowner who is facing foreclosure? If so, you may be unsure as to what your options are. Now is the time to find out. Why? Because you may be surprised how many ways there are to avoid foreclosure. When foreclosure is avoided you can either retain your home, keep your credit in good standing, or do both.

When facing foreclosure, the first step you should take is to approach your bank. It is best if you do this before the issue of foreclosure arises. Once it does, it is still not too late to schedule a meeting with the chief loan officer at your bank. If you can prove that you intend to get your mortgage back in good standing or that your financial troubles are only temporary, your lender may hold off on foreclosure.

Even if your lender is willing to work with you, keeping your home may not be in your best interest. If you are having long-term financial hardships, it may be within your best interest to sell your home before it enters into foreclosure. When making this decision, you may want to talk to your lender. They may agree to allow you to proceed with a pre-foreclosure sale. In fact, they may hold off on the process of taking your home, giving you ample time to find a new buyer. When selling your home as a pre-foreclosure, your home can be listed as for sale by owner or through a professional realtor.

Even if you do not consider a pre-foreclosure sale to be an option, you should expect to hear from hopeful buyers. When you are delinquent on your mortgage, especially to the point of foreclosure, this information becomes public knowledge. Some buyers, namely professional investors, seek out those in trouble. Although having a stranger appear at your door or call offering to buy your home may be rude, it is a decision that you may want to give serious thought to.

Another option that you, as a homeowner, has during foreclosure to hire the services of an attorney. When doing so, see those with specialties in foreclosures or real estate. A lawyer can advise you on what steps to take. They can help you understand the pros and cons of pre-foreclosure sales. In some states, attorneys can use bankruptcy as a tactic to stop the foreclosure proceeding. Although not a long-term fix, it may buy you more time to make a decision. It is important to note that bankruptcy, by itself has a whole list of pros and cons.

Most states have what are known as redemption period laws. These are designed to protect homeowners. They give you a grace period to reclaim your home. If you can make good on your mortgage payment, the foreclosure proceedings will stop. States that have these laws often enable you to reclaim your property even after it has been sold at a foreclosure auction. This is provided that you act within the allotted time frame.

If you reside in a state where you are not given a grace period or a redemption period, you always have the option of buying your home again. Anyone can place a bid at a foreclosure auction. With that in mind, placing a bid and being the winning bidder are two different things. It often takes a significant amount of cash to reclaim your home. Your financial lender will also likely attend waiting to pounce. If the bids are not high enough, they will buy your home themselves. This is done to minimize their money lost. Later, your home will be available for sale as a REO (real estate owned) home.