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The sinking sensation when a foreclosure notice comes in the mail is high on the list of worst things that a homeowner can feel. It’s overwhelming, even though most Michigan homeowners facing foreclosure have known for some time that it was coming. Stopping foreclosure in Kalamazoo is possible. It takes bravery and a willingness to make hard decisions.
Stepping beyond your fear of losing your home
Whatever circumstances have pushed you to the precipice of home foreclosure don’t stop because you’re dealing with this new problem. Whether it’s a divorce, job loss, financial strain, or even the death of a loved one, the problems that led you to potentially losing your home are still there.
People in this situation can have one of many different responses. At first, they might want to put their head in the sand and just ignore it. That’s the hands down worst thing you can do. There are so many options for Michigan homeowners in danger of losing their home. Kalamazoo homeowners do well to investigate the possibilities and make the smart decision.
Great real estate deals in Kalamazoo, MI can eventually turn sour because of market price changes. Though there was a federal moratorium on foreclosure, that’s no longer the case. Tax foreclosed homes can fall into the sheriff sales category. Property listed for sale in Kalamazoo, MI often becomes a great real estate investment when buyers don’t have to pay full market price.
Yes, it’s scary to face losing your home. Getting over the fear will help you survive! Start by knowing your options.
Six ways to stop foreclosure in Kalamazoo
There are so, so many ways to resolve a foreclosure. Some of them are easy and some of them are hugely challenging. One of them is a good fit for most homeowners facing foreclosure.
1 – Pay in full
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The most obvious option is to pay off the total amount owed to the mortgage company that’s listed on the foreclosure paperwork. This includes all legal fees and any penalties that might have accrued. This will resolve the mortgage delinquency.
When a Kalamazoo homeowner pays off their delinquent mortgage in full, the mortgage payment stays the same.
The downside here is that this option is out of reach for most homeowners in Michigan. If you had a large amount of money to pay off the delinquent mortgage, then you’d most likely not be in this situation. However, there are situations where this is possible. A tax return, an inheritance, a bonus on a new job, a personal loan, or a family loan are all possibilities. Selling off other property like a car or personal items could also raise the necessary funds to pay down the past due amount.
2 – Negotiated catch-up
This happens when you and the mortgage company work together to determine repayment terms. It’s one step up from the pay in full approach, in large part because this usually requires large payments in a short amount of time. Think six months or a year.
The terms of negotiated catch-up are generally rigid, so it’s easy to fall right back into foreclosure. This resolution often puts a lot of pressure on homeowners, but it doesn’t change the overall mortgage payment in the end. A forbearance can also help to put a short bridge on the loan and prevent Michigan foreclosure.
It’s a great option for Michigan homeowners who are slightly behind but have new income on board. If there’s not a new stream of income or some other mid-term solution, this can put a huge strain on the budget and cause additional stress.
Negotiating a pre-foreclosure deal in the near future can save the property from foreclosure eviction. Those who search for solutions to prevent the sheriff sale near Kalamazoo can often find those solutions right with the bank that they borrowed the money from.
3 – Loan modification
More intense than negotiated catch-up, loan modification offers benefits and drawbacks.
The delinquent payments are usually added onto the back of the loan, relieving the pressure in the short term. It does extend the life of the loan, but it can be a blessing in the short term. There can be fees and increased interest with this option, so there are costs associated with loan modification.
This step can prevent foreclosure, but it will have serious consequences on the loan. Mortgage lenders are reticent to take this step if you have poor credit history. It’s totally up to the bank whether they’re willing to do a modification.
4 – Filing Chapter 13
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Bankruptcy sounds scary, but it’s not the horrible outcome that many homeowners in Kalamazoo fear that it is. Chapter 13 bankruptcy is really a method of debt consolidation.
The great part about bankruptcy is that it puts the mortgage first, and that can keep you in your home. It’s an effective way to restructure debt and get out of foreclosure in Michigan. Puting off the date of the debt until later through Chapter 13 can reduce the rate of the debt too.
To be clear – filing Chapter 13 halts the foreclosure process.
Debts like personal loans, medical debt, car loans, and credit cards are all unsecured debt. The home is a secured debt. This is why the home loan is given priority in bankruptcy. In addition, interest rates on all of those unsecured debts stop accruing during bankruptcy. Delinquent mortgage payments also stop accruing interest. Late fees stop and any other fees also stop stacking up.
Bankruptcy stays on your credit report for seven years and will impede your ability to take loans in the future. It’s a serious step, but it can be preferable if you want to stay in your house in Michigan.
5 – Deed in Lieu
A deed in lieu of foreclosure is when you give the home back to the bank. It stops foreclosure, but the homeowner loses the home. It’s basically a trade that saves you from formal foreclosure.
The problem here is of course that you don’t get to stay in your home in Kalamazoo if you go with this method. Taxes also don’t go anywhere. You’ll still owe any taxes on the home and those cannot be forgiven.
It’s a quick move and one that works for many families, but it’s a desperate decision because it leaves families trying to find new accommodations. Kalamazoo, MI foreclosure homes are a drain on everyone’s resources. No one wants to go to the point of sheriff’s sale. That process is long and expensive for mortgage holders.
Foreclosure evictions are the last step in the process of getting foreclosure homes in the hands of the bank. It can take months to go through all of that, and the bank would rather take possession of the home than have to go through all of that. A deed in lieu can be a win-win for everyone.
6 – Short Sale
Finally, we come to the short sale. All this means is that the homeowner in Michigan agrees to sell to an outside buyer, who pays off the mortgage. Like the deed in lieu, the homeowner doesn’t get to stay in the home with this method.
Depending on market conditions, there might be less competition for homes near Kalamazoo. Homeowners who act fast can push back the auction dates and pull their home out of pre foreclosure. In today’s real estate market, potential buyers have instant access to information about homes through email alerts. They also used popular searches, like “Kalamazoo foreclosure listings” and “available foreclosure properties in Kalamazoo, MI” to find homes in your area.
Potential buyers can view super saving listings to find available pre foreclosure property in Kalamazoo County to find single family homes. They could also find your home through shadow inventory listings, which are property types that haven’t yet been put on the market. This is why cash homebuyer can find cheap homes in pre-foreclosure to purchase as short sales.
The cash sale of a home can happen fast, which is exactly what the mortgage company wants to happen. The mortgage holder gets the money fast, so they can feel good about the process. The mortgage company might even waive some of the fees and give the homeowner some extra time to close the deal if there’s a cash buyer in place.
Halting foreclosure is simple
Putting a stop to foreclosure can save both your credit score and your dignity. These are hard decisions to make, but there are lots of straightforward options. The estimated market value of single value homes in Kalamazoo County is definitely higher than what the bank will get through sheriff sales, and that’s great news for homeowners.
Homeowners in Kalamazoo, MI who are facing pre-foreclosure need to step back and look at all of the possibilities. Even if the eventual outcome is losing your home, it’s still preferable to bank repossession and a sheriff sale.