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Pre Foreclosure Strategies for Homeowners who Need to Sell in Tampa, FL

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Sometimes, life pushes you down a hard financial path. An unfortunate outcome of job loss, losing a loved one, or other life events is that you can get behind on your mortgage payments. If you’re facing foreclosure in Tampa, you have options.

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Many people facing foreclosure in Tampa, FL look immediately to put their homes for sale. Getting out from under a property, with the help of realtors or on your own, can be challenging in FL. The following strategies for pre foreclosures will help you get through and get back on your feet in Tampa, FL.

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Timeline for Tampa foreclosures

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Tampa foreclosures can happen quickly. The bank will put your home in pre-foreclosure after just three missed payments.

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It takes up to six months for a house to go from default to a sheriff’s sale. During that time, the homeowner stays in possession of the house. Even after the sheriff’s sale, the homeowner continues to keep possession of the home as the bank entertains increased offers from other potential buyers. All through that time, the homeowner can potentially stay on the property.

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Once the bank does take possession of the house, there’s an eviction process in Hillsborough County that’s similar to what happens to tenants who don’t pay rent. This of course only applies if the homeowner is still in the house at the time of the sale.

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It’s possible to negotiate with the bank up until the date of the foreclosure sale. Tampa homeowners are notified that their real estate is going to be sold on a given date well in advance by certified letter, notice posted, or being served by the sheriff.

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Options for FL pre foreclosure homeowners

Homeowners in Tampa, FL have a few options if the person intends to prevent foreclosure.

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1 – Pay off the past due amount

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This is the easiest way to pull out of pre foreclosure, but it’s also the hardest. After all, if a Tampa homeowner could pay off the amount they wouldn’t be delinquent. However, if the homeowner has gotten a new job, is able to secure a line of credit, or is able to borrow some money to get the loan back current, they can pay it to the bank without even entering foreclosure.

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2 – Make accommodation requests to the lender

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Tampa, FL homeowners interested in negotiating with the bank can often get an extension on payments before the listing goes live and the house is bank owned. Check the website of your lender to see what they offer before calling so you can know your options.

3- Pursue a short sale

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Short sales are usually good deals for buyers, but they also keep homeowners from losing everything they put into their real estate in Tampa. You can always turn down the listing broker’s offer, but it’s worth pursuing. Oftentimes, potential buyers search for short sales specifically. If your FL home is in pre-foreclosure, expect to be contacted by potential buyers who want to get your house before it becomes bank owned.

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FL foreclosed homes listing

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It takes a while for information relating to foreclosure listings to hit the foreclosure website. Listing information presented is usually related to the sale of properties, and it’s not unlike the MLS listings. Potential buyers search proprietary database compilation sites to find non commercial foreclosures.

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The MLS is deemed reliable because only people with real estate licenses can add to them through IDX listings. Just as with home listings, pre foreclosures will have the following information included:

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  • square footage
  • real property information
  • property details
  • property history
  • bank/lender information
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A sale in Tampa, FL has to be registered with the Hillsborough County Recorder of Deeds. This information is publicly available, Prospective properties consumers can find this information at the courthouse in downtown Tampa, but the local government is also charged with ensuring digital accessibility. Anyone with web experience can find it – it’s not provided exclusively to real estate agents.

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The information in foreclosure listings is independently verified with the bank. This is why these listings are so trusted by people looking to buy houses.

Prevent your Tampa house from becoming bank owned

You’ve worked hard to purchase a piece of real estate, and the last thing you want is for your Tampa property to become bank owned.

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Don’t stop your search for solutions. Continuously working with the lender while keeping up the search for a buyer is a two pronged approach that will best keep your house off the MLS listing and in your control. Identify prospective properties consumers, reach out to the local mls brokerage, and above all else keep looking for a solution that works for you.

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Whether you’re near Tampa Bay, in Tampa Heights near the Armature Works, or further out in Hillsborough County, your real estate doesn’t have to go into foreclosure. You can prevent it!

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The sheer amount of money at stake in this kind of real estate scenario can be daunting, but you can take control of your Tampa home.

10 Tips to Prevent Foreclosure in Charlotte, North Carolina

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One of the most intense things that can happen to an individual in their lifetime is to lose their home to foreclosure. It’s a huge burden that follows a person for years, even though it takes only about a year to get to the point of no return. To prevent foreclosure in Charlotte, NC, you first have to educate yourself on what your options are.

Understand the impact

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Foreclosure has a devastating impact on your credit. North Carolina homeowners who get caught in foreclosure proceedings won’t be able to secure another mortgage, or potentially get things like a car loan or a new line of credit.

A foreclosure follows on your credit for seven years. This can cause financial difficulties if you try to work with a local company or a national company to buy goods or get a loan. Any homeowner in the Tarheel State who has potential foreclosures in the future needs to be aware of the long-term impact of foreclosure in NC.

What’s important to realize here is that, in North Carolina, the missed payments leading up to the foreclosure have the biggest impact on credit scores. The foreclosure itself won’t have as big of an effect on the ability to get loans in the future – it’s all of those missed payments.

The foreclosure process in North Carolina

When there are enough missed payments on a home loan, the house goes into default. That’s the point when a mortgage company can initiate foreclosures on a property.

Mortgages are loans that are secured with real property – a home for most people in Charlotte, North Carolina. If that homeowner doesn’t make their payments on time and in good faith, the lender can repossess the property and sell it at auction under North Carolina foreclosure law.

At auction, the Charlotte home is sold to the highest bidder. That bidder then takes possession of the home immediately, and the person or people living there have to vacate through the eviction process.

That’s a wide overview of what foreclosure in North Carolina looks like, and for most folks, that’s enough for you to know. However, if you don’t have the resources to pay for the cost of the mortgage payments, you’ll want to know how you can avoid foreclosure.

North Carolina legal requirements of lender

Under the North Carolina General Statutes, which are the laws that govern the state, a lender can’t start the foreclosure process until a homeowner is behind roughly four months – 120 days – on their payments.

Once you miss a payment in the Old North State, you’re immediately thrown into pre foreclosure in North Carolina. this doesn’t materially mean anything. It just indicates that you’re struggling to make payments and are in danger of heading into foreclosure.

During this time, North Carolina law permits the lender to charge late fees for those missed payments. They’ll generally send a breach letter to give you information about how to avoid foreclosure.

Keep in mind that no company wants to foreclose on those loans. If a borrower fails to make their mortgage payments, then there are no benefits for the mortgage lender. They are saddled with the cost of reselling the home and potentially having to make repairs if it doesn’t sell at auction.

Direct contact from the lender

Federal law requires a mortgage holder to at least attempt to contact you by phone as well as in writing. They have to reach out to you to let you know where you stand and also to let you know what options you have to catch up a mortgage in Charlotte, NC.

Consumers are offered some protection under North Carolina law and federal law.

Understand your promissory note and deed of trust

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There is so much paperwork that goes into a mortgage, and much of it stuff that Charlotte homeowners don’t even read initially. All of the legal terminologies can be frustrating and overwhelming.

One of the first things that you should do if you are in danger of foreclosure is to go and look at your promissory note and your deed of trust. These are the legal, binding documents that will lay out exactly what has to happen before your house can sell at a foreclosure auction.

You have protections under North Carolina law and under federal law. Consider enlisting legal services to help you understand what is in these documents to offer you those protections. These services are often free through home advocate organizations in North Carolina.

You have contractual rights to protection in America. Don’t ever think that a large mortgage company has a single special privilege over you.

How long does it take to foreclose on a house in North Carolina?

With foreclosures in North Carolina, the lender must contact you by phone no more than thirty-six days after you’ve missed that first payment. They must then contact or attempt to contact you again after each missed payment following that first one.

No more than forty-five days after your first missed payment, the lender is legally obligated to contact you via a notice from their department of loss mitigation to give you options. You’ll also get an individual mortgage counselor assigned to you to help you prevent foreclosure.

Under Governor Roy Cooper in North Carolina, mortgage companies have to contact you via multiple modalities to help you get back on track.

The foreclosure hearing

The vast majority of foreclosures on residential homes in Charlotte and across North Carolina are nonjudicial. Though there are judicial foreclosures in North Carolina, they are the exception, not the rule.

Though the process is called nonjudicial foreclosure, there is generally one court appearance that owners are sometimes required to make. This is the actual foreclosure hearing itself. It’s the final step in the process.

A lender must let the homeowner know about this by serving them with a “notice of hearing”, which comes by certified mail ten to twenty days prior to the date of the hearing. This notice can also be served in person or by being posted on the door of the home.

The foreclosure hearing is the point of no return in the foreclosure process. After this most programs can no longer assist owners to prevent foreclosure.

How can I stop foreclosure in NC?

Prior to the foreclosure proceedings, there are many ways to stop the process from going forward and to prevent losing the house, being evicted, or falling into homelessness.

1 – Get current on the home loan after the first missed payment

This one might be obvious, but it’s the best way to prevent foreclosure. That’s partly because fees will accumulate on the loan with each missed payment. Those fees will make it harder to afford to catch up.

This might mean taking a hustle job with a local LLC, reaching out to nonprofits for financial support to catch up on other bills and free up cash, or working with programs on financial literacy.

Bills can feel relentless for families. Sometimes it’s like trying to fill a bucket with a hole in it. There are programs across America, not just in North Carolina, that can help you to catch up on your mortgage or figure out ways to do so. (Hint – there are some ways to do so further on this list!)

2 – Redeem the property

This is a last-minute hail mary to save families from homelessness due to foreclosure in Charlotte.

Redeeming a property is when the homeowner is able to pay off the total amount of the foreclosure before the sale of the property. North Carolina law gives Charlotte homeowners facing foreclosure a ten-day window after the auction to pay off the loan.

3 – Work with an investor on an upset bid

Even if you can’t redeem the loan prior to that ten-day window, there might be another chance to save the loan from foreclosure. An “upset bid” is when someone comes in on that ten-day window and offers a higher bid on the house.

It requires a hefty amount of funding, but that ten-day window resets every time there’s an upset bid on the property. This can go on and on, dragging a Charlotte foreclosure out for weeks after the foreclosure auction.

In Charlotte, North Carolina, an upset bidding war is most likely to happen between two investors who want to buy the property because of location or some other benefits they see. However, a homeowner can agree to sell to a real estate investor, then rent out the home after. This requires a contract and is tricky, but it can allow families to stay in their homes despite the foreclosure.

4 – Apply for loss mitigation

Lenders are mandated by the federal government to offer loss mitigation after one or two missed mortgage payments. Those facing financial difficulties should absolutely look into assistance like this when trying to pay down missed payments.

Foreclosure prevention is important in America. Services to help homeowners with foreclosure prevention through loss mitigation can provide assistance in Charlotte and across North Carolina.

These programs provide foreclosure prevention assistance for free. No one should ever pay to keep their home out of foreclosure in NC, not to anyone except the lender. Depending on the situation you’re in, there are options to make a payment arrangement with or without the help of outside agencies.

Always remember that mortgage services do not want to have to sell the house. They would much rather collect the debt and keep homeowners in their homes. This saves them cash and prevents additional costs.

5 – Apply for a deed in lieu

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It’s a hard thing to think about for struggling families in Charlotte, but it could be better to give the house over to the mortgage company rather than to let the clock run out and have the lender take possession through foreclosure.

A deed in lieu is when the homeowner and their spouse agree to give the property over to the bank, rather than allowing the home to foreclose. It’s worth it to reach out to agencies for free advice before making the decision to go this route. There could be a North Carolina program that will provide benefits to prevent this outcome.

With a deed in lieu, the bank takes possession of the single-family home in Mecklenburg County before the back payments throw the mortgage into foreclosure. Homeowners don’t keep the home in this case, but for many homeowners, it’s a better option.

Once the house is turned over to the bank, homeowners can get a fresh start in a different home in Charlotte, NC without taking the credit hit.

6 – Apply for a forbearance

A forbearance is when the mortgage company agrees to fold the past due payments into the loan at the end, effectively catching up on missed payments on the Mecklenburg county home. This is one of those services that people don’t think of enough when they miss payments.

There is a limited amount of time that forbearance can apply to on any given loan on a single-family home or any kind of home in North Carolina. However, families in Charlotte can catch up on every missed payment this way and start from scratch.

If a family is getting assistance through government programs like NC Health Check or free and reduced lunch for families with kids, that can qualify them for forbearance through foreclosure prevention programs in North Carolina.

A forbearance often has strict income requirements in NC. Individuals must sign an attestation that they have a hardship with their income that is preventing them from making a payment. Programs like Medicaid and food stamps almost automatically fill the requirement for forbearance related to hardship.

7- Obtain a loan modification

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As early as possible after a missed payment or even in advance if you know that you’ll be missing a payment, get on the phone with the mortgage company.

You want to ask for a loan modification. This is the best way to allow you to keep your home while fulfilling your legal requirements to the lender.

A loan modification might lower the amount you pay for a while. This will give you a chance to look at programs related to assistance, talk with investors, or find a new business if you’ve lost your income in Charlotte.

This kind of assistance is free in NC, and Charlotte homeowners have a wealth of resources to work within a loan modification program.

8 – Look at government programs

There is so much assistance out there for families facing financial difficulties in Charlotte, NC. Particularly after the onset of the COVID 19 pandemic, the government created benefits and more than one program to help homeowners access assistance.

The American Rescue Plan provided multiple entrees into services for families during the coronavirus pandemic. These services covered everything from hardship forbearances to deferments. Mortgage payments worked with legal experts to create things that worked within the American Rescue Plan.

If your income meets the requirements, you’ll be able to get assistance in the wake of COVID 19. Though many of those COVID 19 relief programs are no longer available, they are a great example of how government programs can help provide resources through agencies.

The infrastructure for many of the services are still in place, allowing homeowners to access some of the program support that agencies started providing during the coronavirus pandemic. These are always free, and each program has its own ways to access debt relief.

9 – Work with a housing counselor

NC is home to a great network of housing counselor services. In Charlotte, homeowners can visit offices in cities across Mecklenburg County to get sliding scale services. Often, these are free for Charlotte residents.

If you are struggling with medical bills, you’ll be able to access a program that can help you find agencies to help keep your single family home. When you can’t afford the cash to save your house or feed your family, it’s important to the city of Charlotte to help you avoid homelessness.

Support programs, new ones, and old ones are a great way to figure out how to save cash and maximize your income. It’s possible to work with these agencies free of cost in Charlotte.

Foreclosure prevention is important for the community in NC, not just for homeowners and mortgage companies in Charlotte. That’s why foreclosure prevention services with a housing counselor are often free of charge in NC.

10 – Pursue a short sale

A strategic way to avoid foreclosure and get it all over fast is to pursue a short sale.

In this method of foreclosure prevention in NC, a homeowner works with an investor to sell the home for much less than the balance of the debt. This must be done in conjunction with the lender, who will agree to take less cash than is due on the home.

In this instance, the homeowner does not get to stay in the house. However, they are able to prevent a major hit on their credit or the credit of their spouse if they are a comaker on the loan.

A short sale is a completely legal process. An investor might have a related LLC or they might be an individual working as a real estate investor on the side. In any case, an experienced investor in Charlotte, NC will know exactly what the legal requirements are for a short sale. They’ll also be able to walk you through any related bumps that you might encounter along the way.

Other options for foreclosure prevention

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Not mentioned in our list of tips is anything to do with Chapter 13 or Chapter 7 bankruptcy. Both of those options automatically put a stay on foreclosure proceedings, however, they have a completely different set of legal and financial ramifications.

If you are in the military or are a combat veteran, you might have other free resources at your disposal. North Carolina is home to many retired and active-duty military servicemembers.

Foreclosure relief for military personnel is available under the federal Servicemembers Civil Relief Act. If you are on active duty or have been on active duty within the last year, no mortgage company can foreclose on your home during that time. This gives you a great deal of grace to figure out your financial situation if you’re struggling in North Carolina.

Don’t give up in the face of foreclosure!

Hands down, the simplest way to deal with foreclosure in North Carolina is to ignore the problem. Eventually, this is one that will go away. However, it will go away when your home is in the hands of a lender.

Not only will you have to find another place to live, but you’ll also have a massive hit on your credit that will prevent your financial autonomy in the future.

Taking action to prevent foreclosure can make all the difference. Look at all the options, and safeguard your future against foreclosure!

Selling Your House During Foreclosure

The hardest part about foreclosure is that it makes homeowners feel like they’ve failed in a tremendous way. They aren’t able to keep up the payments that they promised to make to the mortgage holder, and now they’re faced with hard decisions that are often overwhelming. Learning how to sell your house during foreclosure can help you feel better about what’s going on, saving you not only money but also preserving your peace of mind.

An essential piece of this is learning about the foreclosure process and how it affects your ability to keep your house. At the very least, knowing the foreclosure process will give you a real world understanding about your timeline for home sale.

Each step builds on itself. It’s critically important that you know that you can sell your home all the way up until the end of the sheriff’s sale. There’s a lot between your first missed payment and that final point. All along the way, you have lots of options.

Sometimes, the best option is for you to let go of the home.

The emotional toll of foreclosure

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When you buy a home, it’s usually with the idea of being in it for years or even decades. People often land in what they think will be their “forever home”, only to find that life circumstance ends up forcing them to rethink their dreams. Facing foreclosure is one of the toughest things anyone can go through. 

By the time a homeowner has gotten to either the pre foreclosure stage or the foreclosure process begins, they’re generally exhausted and at the edge of their ability to cope. What’s important here is that homeowners take a moment to figure out what their options are, without emotion.

The phone calls and the tons of letters from the company might be easy to ignore for a while, but it’ll all become real serious real fast as time goes on. Though it can cause us to freeze up from the stress, judicial foreclosure will only get worse if you ignore it. 

Potential foreclosure relief

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Oftentimes, there are many more possibilities than people realize. Whether it’s loan modification, short sales, choosing to file bankruptcy, or even getting the full market value for a home through a cash deal, homeowners can try avoiding foreclosure.

Even though this step won’t totally erase the struggles they’ve had, it can make a huge difference for many homeowners.  Sometimes, looking after your emotional wellbeing is the most important thing.

The selling price of a home in foreclosure might not be as high as it would be if you worked with a real estate agent through a traditional sale, but it’s preferable to the alternative.

The short sale process, where the bank takes less money than what’s owed, is great if I want to sell my home and avoid a deficiency judgment. It’s much better to allow everyone to take a chunk of the loss than it is to take it all on yourself. To sell a home through a cash offer, even if it’s for less than what the bank has stated they need, is still much better than what the bank will get at auction.

What is pre-foreclosure?

Before formal foreclosure proceedings start, there’s a long run up to the final date that’s called pre-foreclosure. During this time, the homeowner still had possession of the home, and they still have the opportunity to get the loan back on track.

This is the point when it’s easiest to avoid foreclosure. There are lots of missed payments, and there will be a hit on the homeowner’s credit report, but there isn’t yet a final decision. Loan modification and negotiated terms are easiest to get through during the preforeclosure stage.

The importance of three missed payments

At the time of the original sale of the home, the homeowner signs a contract in which they agree to repay the amount borrowed through a mortgage loan. This is generally in the form of monthly payments, which can either stay the same throughout the life of the loan, or they can change in the case of balloon loans.

If, for any reason, the borrower doesn’t make those payments for three consecutive months, the lender starts the pre-foreclosure process. At this point, the loan is in default.

Default doesn’t sound overly ominous because it’s not. Default is really just a warning. Lenders want to get back what they’ve put into the house in the form of mortgage debt.

After three months of missed payments, the lender is now seriously concerned that the homeowner is not going to keep up their part of the agreement.

Catching up overdue mortgage payments

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Making mortgage payments isn’t the only way to catch up. The homeowner needs to start looking at other possibilities to pay off the loan. This could be in the form of a short sale, or working with a real estate agent.

Default is only the first step in the process, and homeowners have plenty of options to get their mortgage payments back going from this point. No mortgage company wants to go into foreclosure. This initial foray into the preforeclosure process is the lender’s way of getting the homeowner to come back around to paying their mortgage payments.

Whether a lender is using a law firm to go through judicial foreclosure, or if the state you live in uses the non-judicial foreclosure process, selling your home will stop the foreclosure process. The attorney client relationship means you can talk to your own law firm to get advice on timelines and options.

Options for homeowners in preforeclosure

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For people who are in a tough spot because of problems with tax returns, job loss, burdens from other lenders, medical bills, or any other serious financial situation, selling your home can be an option to stop home pre foreclosure. If you need to keep your home and have some financial improvements coming your way, then you can talk to the lender and avoid sale.

Whatever terms the lender agrees to, whether it’s a fair price or a loan modification, that can help you to get out of preforeclosure. If you can’t afford to keep your house though, it’s just time to sell it.

It’s much worse to go through the entire process in a state of denial than it is to find out you’ve crossed past the point of no return on your loan.

Talk to the lender

The faster you can get yourself together, the better. Many people are frozen and totally helpless at this point. That’s a dangerous place to be. When you reach out to your lender, you can work through all kinds of methods to keep your home. They can put a forbearance on the loan to give you more time. They can also use loan modification.

Typically lenders are forgiving and, if requested, can allow you more time to sell before losing your property to an auction or the bank.

Even after contacting your lender, you will want to take action quickly. If you cannot sell your home in time, you won’t only lose your home and thousands of dollars, but serious damage can be done to your credit.

What is a notice of default?

When someone is going through significant financial hardship, things can start to snowball and they can end up getting further and further behind. After three to six months of missed mortgage payments, the lender will send out a notice of default.

This is a significant step in the foreclosure process because it’s a matter of public record. While this letter goes out personally to the homeowner via certified mail, it also goes to the courthouse. This is the first real red flag in terms of financial health, and it will absolutely place a black mark on a person’s credit history.

Here, the homeowner has a good chance to negotiate lower payments, delay payments, or even restructure the home loan. 

The whole process from this point forward lasts somewhere between three months and a year. That’s from the issuing of the notice of default to the auction, which is the last step.  How long it takes depends on the state the home is in.

What is a notice of trustee’s sale?

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There are lots of words for the actual sale of a foreclosed house. Sometimes it’s called a sheriff’s auction, a trustee’s sale, or a foreclosure auction. All of these mean the same thing – the bank is officially selling the home to a third party.

A trustee’s sale is the end of the line, but it doesn’t happen immediately. Depending on the state a home is in, from the time foreclosure starts with the notice of default to the time they get a notice of sale could be as long as a year. If the homeowner comes up with enough money during that time, they can stop the home from being foreclosed on.

After the home loan goes into default, the lender will still give the homeowner time to catch up the loan.  Phone messages from the mortgage lender are consistent throughout this process. They’ll also send emails and continue to send letters. All of this is with an eye to avoid foreclosure and engage in loss mitigation. It’s much better for the lender to sell a home facing foreclosure than it is to foreclose on the property!

Last-minute foreclosure sale

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The whole idea of getting a basketball through the hoop in just before the buzzer or sliding under the door just before your hat is lost forever is exactly what some foreclosure deals feel like. If you’re in a dire situation, selling your home before it’s foreclosed can be a life saver.

A sherrif’s sale is a public event. Anyone can come to the table to buy a house with a foreclosure notice at the sale. If you are able to sell your home prior to that date through a short sale, you can stop all of this and avoid foreclosure. Though you might be in the middle of the foreclosure process, that doesn’t matter until it’s finished.

There is time all the way until the very last moment to avoid foreclosure. Most lenders will keep sending letters and calling to attempt to work out a repayment plan all the way until the date of the auction. This is important – the foreclosure isn’t final until the auction is complete.

Your property will be published in the local newspaper indicating that the property will be available at public auction. The owner’s name will be printed in the notice and newspaper, as well as its address, a brief description of the property, and when and where the sale will take place.

Auction

If you are unable to sell your home to pay off the mortgage loan prior to the auction date, then your home will go up for bidding. The lender will sell your home to the highest bidder.

The property address and the information about the property are first published in the local newspaper. Foreclosures generally avoid large papers like the Washington Post. This lets potential buyers know the pertinent information. Included here are the owner’s name, the address of the property, a short description, and the details of when and where the sale will occur.

At the public auction, the house is sold to the highest bidder.

What if no one buys the home at auction?

Short sales for foreclosed homes

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It’s possible that the mortgage company won’t be able to sell your home at auction. The foreclosure process is similar to a traditional home sale in that someone still has to want to buy the house.

There are two common reasons that a home doesn’t sell during foreclosure.

First of all, there might be too many liens on the property that make it unattractive to buyers. This kind of financial information can be detrimental to potential buyers. The remaining balance of the other debts besides the mortgage can make it not worthwhile for a person to buy the home.

The other reason people might not go for a foreclosed home is lots of needed repairs. If it’s going to cost far too much to fix up the house, then potential buyers might not be able to justify that cost.

For whatever reason, if no one buys the home at auction, it then becomes the property of the bank. Bank-owned homes are the end of the line for houses that have a defaulted mortgage. The bank is still going to try to get their money back out of the house. In working to sell my house, the bank might have repairs done. the might also work to remove liens to make it more attractive to buyers.

One thing a bank is unlikely to do is to involve a real estate agent in selling your home. At least, they won’t do this in a meaningful way. They might enlist an experienced agent to come in and work on behalf of the lender to work on the home or to stage it.

Selling your home is not about going all in for the lender. The goal is to get it gone without paying closing costs. They just need to get it off their hands as quickly as possible.

Foreclosure eviction

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The eviction process for a foreclosed home is extremely similar to the eviction process for a rental property.

The homeowner can stay in the house until the foreclosure is complete. Once the property is sold, a homeowner will get an eviction notice that orders anyone who is on the property to leave immediately. This is served by the local sheriff.

The bank will give the homeowners a few days to get their things together and leave. Personal property left on the premises becomes property of the bank. These houses are sold as is, so the new owner will take possession of whatever is still there. Furniture, clothes, equipment, and any other kind of personal property is the responsibility of the new owner to handle.

If a homeowner refuses to leave the property after foreclosure, then law enforcement can remove them by force. Continuing to stay on the property is trespassing after the auction.

When you owe more than the house is worth

money owed for mortgage

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In some instances, the house has depreciated and you owe more than the house is worth. Settling the mortgage through a short sale will keep your credit report clear. Maybe you had a high interest rate or took on a mortgage you couldn’t afford.

This is an instance where knowing how to sell your house during foreclosure can help you to avoid foreclosure altogether. This could save your credit report from a big hit and also allow you to sell your home.

In a short sale, you sell the home for less than the debt you owe. For this reason, a short sale might sound like a bad deal for the bank, but that’s not true. The prospect of going through a foreclosure is so distasteful to the bank that they’re willing to negotiate.

Though the mortgage holder might lose some money on the short sale, they’ll probably make more than if they sell the home themselves. A short sale offers them a chance to get more money with less hassle.

Banks hate to take possession of a house. A bank isn’t a real estate agent, and they aren’t interested in holding real property for long. Remember, a bank’s business is money and transactions. A mortgage is their end goal, not to have a piece of real estate.

A short sale will still save you from the huge hit your credit score takes if you let the bank take your home. If I want to sell my home when I owe more money than the mortgage, I need to take hold of the situation.

The trick with a short sale is that you have to find a buyer. The good news there is that there are lots of people who are willing to buy your home in preforeclosure, all the way up to that magic auction date. A short sale option is attractive to a buyer because they can then turn around and sell the home themselves. They won’t have the time crunch that you have when you’re facing foreclosure. 

Stopping foreclosure without selling

House, Auction, Public Sale, Buying, Selling, Megaphone

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The worst thing that people do is to hide from their mortgage lender. If you don’t make some effort,  a lender will naturally take legal action to get their money back. That’s understandable.

You need to reach out to your lender and ask them about ways to catch up your mortgage. Lenders will take legal action if a homeowner doesn’t try to work out a deal with them. The best option for homeowners is to reach out and ask for more time to catch up.

A lender might be willing to restructure the loan with a different interest rate. They could refinance the home. You could also restructure the loan to allow you to catch up on missed payments.

The final option would be to to file Chapter 13 bankruptcy. That is something you should talk to a law firm about, as it’s a major step. Chapter 13 is likely better for your credit score than foreclosing. Again, I might decide to sell my home before choosing bankruptcy.

A foreclosure specialist can help

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There are some real estate companies out there who specialized specifically in foreclosure. These companies work with people who are in danger of losing their homes and help them get a sale going.

This could be through a no obligation cash offer, or it could be as a more traditional real estate sale. The latter only works if the owner is able to catch the mortgage up in the meantime. That’s because the bank has to have some leeway before a home goes into default.

A foreclosure specialist will offer quick, experienced real estate options for avoiding foreclosure. They can help owners to wade through the neverending paperwork to get out from under the mortgage.  It’s good to have someone on your side during a tough loss like the one you face when you’re not able to cover your mortgage.

Though you’re probably new to this as a homeowner, this is their profession. A foreclosure company is above board, and they will spend time working to get a deal that works for you. Remember, you’ve still got your home as leverage. That’s an asset that people are willing to pay for. Leverage that asset!

Avoiding the worst case scenario

What you need to decide is what your worst case scenario looks like. You might be overwhelmed at the start of this process, but the more you learn, the more empowered you’ll feel.

Look for a company that offers a free consultation and will give you lots of options. Often, the worst case scenario is not nearly as horrible as you think it is.

Selling A House With Back Taxes – A Full Guide

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There are lot of reasons that someone gets behind on their home taxes, and they very rarely have to do with some deep and terrible problem. Often times it’s due to an inherited home that comes with back taxes or a life change like a divorce. Whatever the reason, it’s possible to sell a house with back taxes to get out from under the burden.

A clear home title

In order to sell a house, the title on the property has to be totally clear of any liens. This includes liens from creditors like mortgage companies and also government liens. 

When someone owes money to the IRS, it’s possible that the federal government will set a lien against their house for the money owed. This is because a house is a piece of real property that the government can count on to get their money back. This process is fairly automated, so you can expect it to happen if you owe taxes. 

Many homeowners are surprised to find out that the money they owe to the IRS has been applied to their house. It’s a nasty surprise to find this out when you get to closing on your home! 

The lien is not able to be assessed until the IRS files something called a Notice of Federal Tax Lien with the Secretary of State in your state or with the register of deeds in the county where you live. This is how people are notified of the lien, and it’s how a title search is able to find out about the tax lien.  

The government is relentless

When the IRS assesses a tax liability against you, they can put a lien on anything that you own. That applies to your house, but also to any property in your name. Cars, boats, some kinds of businesses – anything. The federal government is going to get what it’s owed, one way or another. This kind of debt is unlike any other sort of debt that you might owe.

It’s not just the IRS. Property taxes that are owed to any government agency are the first on the list of debts that must be paid. A lien against your home from any government agency is similar to a federal tax lien. In all cases, this kind of debt must be taken care of before any other action can be taken on the house. 

Options for selling with a tax lien

Unpaid property taxes on a home

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Though the lien has to be taken care of, that doesn’t mean it has to be paid directly before you can sell your house. You can make headway by taking care of your taxes in all sorts of ways, not just by paying them in full before you list your house. 

All of these options involve negotiating with the tax authorities to sell your house. Homeowners who owe back taxes have to make provisions for the money that they owe in order to sell. You either have to pay it upfront or negotiate to pay it on the other side. 

Option 1 – Close with enough cash

The first and easiest option to sell your house with a tax lien is to get to closing with enough cash to pay off all the debts. If your selling price is high enough, you can pay off all of the liens owed on your house. 

Working with a real estate agent, you can factor in your taxes owed into the closing costs. You can also get a fair cash offer for you house and so settle the debt that way. Getting the tax bill paid at closing is a perfect way to settle your tax bill. Sale proceeds are used to pay the taxing authority.

Don’t forget that you’ll have to pay realtors fees as well. Assuming you can get market value for your house, you might not have enough equity to pay the mortgage balance and the back taxes. You can only sell your property if you can work with the government body to settle the back taxes.

Sometimes, homeowners will sell their house for a high enough price to pay off all of the liens on it and also to put money in their pocket. That’s obviously not what happens for everyone, but it’s certainly a best case scenario. 

Option 2 – Chapter 13 bankruptcy

If there is not enough money in the sale to cover the cost of the tax liens that are on the property, then the only option is to pay the taxes to the IRS before.  One way to do this is to file for Chapter 13 bankruptcy.

Through this process, you’ll be able to structure your debt so that you can pay it off. When you do this option, you might even be able to negotiate with the IRS to pay less than what you owe. An Offer in Compromise is a huge benefit if you owe back taxes. 

With this kind of restructuring, you can get a payment plan that will make it all work for you. An IRS lien is not going to go anywhere, but you can still get it all done in a timely manner. The sales proceeds from all of your assets can be folded in to balance the debt you owe. This can cover state taxes as well as taxes from any other government body. Your property is a fantastic way to settle the debts you owe.

Chapter 13 is emotionally difficult to engage in. It can feel like a massive failure to move forward with this decision, but it’s much better than the alternative. Chapter 13 restarts the clock on everything from credit card debt to mortgage payments to taxes. It’s a clean slate to rebuild from. 

Option 3 – IRS Subordination

IRS tax lien on a property

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This option is really part of option 1. With this process, the IRS agrees to put the money they are owed behind other creditors. They are able to make what you owe to them subordinate to what you owe to other creditors, namely the mortgage company.

Why would the IRS subordinate a tax lien? The reasoning is simple – they want to get paid. By putting their lien behind other debts, the house can sell and they can get their money. Even the federal government wants to avoid a tax sale if you owe back taxes. Make no mistake though – property tax liens only go away when you pay them. Even if you subordinate the debt, you still have taxes owed.

Option 4 – Work with an investor

Tax debt from federal income taxes

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Real estate is a booming business, and investors are always looking for homes to buy for cash. Working with a cash investor can be one way to get out from under a tax lien. 

Investors can resolve the debt in the process. After all, they can see that there is a tax lien through a title search. It’s not as though the money you owe is a secret. 

A cash investor can pay off the tax lien as part of the closing process. These buyers are often less afraid of deals that involve tax liens or home repairs than traditional home buyers. They’ll work with you to buy your house with back taxes. 

Getting a buyer to pay off the lien on a home is especially possible in a seller’s market. A cash buyer will sometimes pay the IRS or the municipal government upfront in order to facilitate the sale of the house. In a hot real estate market, this is even more possible. In return, there’s a credit on the home to cover the cost of the upfront lien.

Understand the possibilities

The takeaway for homeowners who owe back taxes here should be that it’s possible to sell a house with a tax lien. When you owe delinquent property taxes, whether it’s from unpaid income taxes or from tax debt that is associated with some other source, it’s a huge problem. A federal tax lien or a property tax lien can be part of the foreclosure process or it can be a legal claim from local governments. Whatever the reason, if you’re saying “I’m ready to sell my house”, then know that it’s possible!

Though you may want to sell your house fast, getting out from under your property isn’t likely to be as easy when you owe back taxes. If you have enough equity to cover the taxes, it’s much easier. You can work with a cash buyer or a real estate agent to get the options that are right for you. Don’t be afraid to check with a title company yourself before you get surprised.

This process might take a little more creativity and it might not be as easy as a traditional sale. It’s still a real option. Don’t feel overwhelmed by the process. Look over what’s possible and make a decision about the right way to take care of your tax lien.

How to Sell an Abandoned Property in Raleigh, NC

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A house is more than four walls. It’s a place that people dream and it’s a place that memories are made. People put a lot of emotional energy into their homes, but they also put a lot of cold hard cash into their homes. Sometimes that all goes wrong, and suddenly there’s a need to sell an abandoned property in Raleigh.

It’s hard to imagine why a house would fall into a state of disrepair that would warrant abandonment. Property is the biggest investment that most people will make in their lifetime.  

Most people who need to sell abandoned homes come into them because of an inheritance or a rental property problem. Whatever the reason, selling an empty house is different from traditional home sales. 

That doesn’t mean that it’s impossible or that it’s challenging, it just means that you have to think a little differently. Selling North Carolina abandoned places can be a win-win for everyone involved.

How homes become abandoned

Abandoned property near Agnes Hospital

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Life is not a straight line, and neither is the home buying market. There are tons of different pressures on homeowners. Though it can be unimaginable that a property could fall into enough disarray that it could become a condemned property, it happens all too often. 

This is true even in the booming seller’s market that we’re currently in. Not everyone has the tools to sell their home, and the whole process can be hugely intimidating. For some people, it’s easier just to walk away from a house and ignore the problem. 

Here are three reasons why homes become abandoned.

1- High repair costs

Sometimes the cost to repair a home is simply too high to conceive of taking on the project. People often think that the only way to sell a house is if it’s in great condition and they partner with a real estate agent. They don’t realize that they could sell the home for an all cash offer to a we buy houses company or an investor without making repairs. 

Renovating a house that has termite damage or that as a significant mold problem can be totally overwhelming and it can seem impossible. Structural problems or previous damage from natural disasters can also compound issues that a homeowner is facing. 

These problems continue to snowball, especially when a homeowner doesn’t have the means to make the smaller initial repairs. After a while, it’s just too much to tackle. It’s easier to ignore a problem than to deal with it.

2- Emotional attachment

Abandoned property in Wake County

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A very common reason that people don’t want to sell a property is the emotional attachment that the family has to it. If the home has been in the family for many years and holds a lot of memories, people can be reluctant to let go of it. This is understandable, but it causes all kinds of issues. 

There’s also the issue of the overwhelming number of things that have to be addressed when someone passes away. The death of a loved one leaves a whole host of things to take care of. From the funeral arrangements to handling past debts to dealing with personal belongings, there’s so much to do. Losing a loved one is always unexpected, even after a long illness. You never know everything that has to be taken care of until it’s time, even if there was time to prepare previously. 

A home can stay empty for years while the probate process winds away. If no one is living in the house, the home can fall into disrepair. This abandoned state is not easy to come back from, which leads the family back up to #1 on our list. 

3 – Acts of God

Natural disasters are often referred to as “acts of God” in contracts and insurance policies. Hurricanes, earthquakes, tornadoes, and floods can be a harsh reality for anyone to deal with. Natural disaster prone places like coastal areas in North Carolina can be especially vulnerable to these problems, leading to more abandoned houses. 

The hurricanes that pass through North Carolina east of Raleigh can be devastating, especially in economically depressed areas. Small towns like Bunn, Knightdale, Roanoke Rapids, and Kinston, NC are all more likely to be affected by natural disasters. Flooding from local rivers like the Roanoke River and the Dan River can make houses totally uninhabitable. 

Once something like this happens, it’s difficult to come back from that kind of problem. Fixing the home can be held up by insurance denials. 

Problems with abandoned homes

A property can have all kinds of problems once it becomes abandoned. There might be issues with squatters coming to the house and living there. North Carolina squatter’s rights can cause problems for people who own the property. Not only that, but squatters can lead to legal problems as well. 

If a property stays empty for long enough, it could become condemned. In this case, the city of Raleigh or the Wake County government could step in. Eventually, the problem can lead to the house being forced to be torn down. The city can repossess a piece of property that’s posing a danger to the neighborhood because it’s in such a state of disrepair. 

Selling your abandoned house

House ready for demolition in North Carolina

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Neighborhoods that have abandoned properties located in them tend to bring the value of everyone’s home down. When there are dangerous structures, whether they are posted with no trespassing or not, it’s common for people to go inside. People will sneak into doors left opened, ignoring any information about the building and its safety.

While you’re not required to keep a property up if it’s not part of a housing organization, there is still a responsibility to the community to take care of a property. It’s good for everyone. Sometimes the best way to be a good neighbor is to sell the property so that someone else can fix it up or tear it down.

You don’t even have to empty the contents of the house to put it on the market. You don’t have to make repairs and you don’t have to go through a long process. Selling your house quickly, even if it’s in rough condition, is possible if you’re willing to take a fair price for it given the condition.

If you need to sell your abandoned house in Raleigh, there are a few steps you can take. It’s not as complicated as you might think!

1 – Assess the property condition

The first step is to look at the property and find out what kind of condition it’s in. You might need to bring in a professional property inspector or a real estate assessor. Contact a local real estate agent if you’re looking for a service like this in Raleigh. You can also consider working with Raleigh general contractor to find out what’s going on with the property.

You may want to do an unclaimed property search to make sure that there’s no other property owner out there that has a claim to the property. This is especially true if you inherited the property from someone you’re related to. This could involve checking with the superior court records to make sure that there’s no claim on it on record with the city.  

2 – Figure out what price you need

Depending on what your needs are, you might want to sell the house fast to a cash buyer for a lower price than market value. You can work with a real estate agent to find out what the market value is for the home. Another option is to contact a cash buyer in Raleigh to see what cash price you can get for the property. 

You might have back taxes that you owe on the property and need to clear enough to pay off the tax lien. If there’s still a mortgage on the house, you’ll want to clear enough to pay the loan off. Going into foreclosure on a distressed property is something no one wants to have to face. You can avoid foreclosure by getting a fast sale for a good price. Whatever that number is, make sure you know it.

What method you use to sell your abandoned property will determine what price you get for it. You’ll factor in the condition of the house when you do this, as you’ll be able to get a realistic idea of what your abandoned home in Wake County is worth. 

Thank you, next

Though it can feel totally overwhelming to deal with an abandoned house in North Carolina, getting it sold will give you a whole lot of peace of mind. You won’t feel the crush of the weight of this problem hanging over you any longer!

An abandoned house can be a huge financial burden for a property owner in North Carolina. Freeing yourself of this kind of problem will make you feel much better about the whole situation. What’s even better is that the property can then be used by someone who has a real need for it. 

Whether you sell your abandoned property to a real estate investor or to a family who wants to fix it up, it’s better than the home getting condemned and torn down. 

How to Stop Foreclosure in Kalamazoo, Michigan

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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

homeowner paying off foreclosure

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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

foreclosure properties saved through bankruptcy

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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

property listed for 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. 

Selling a Home in Pre-Foreclosure in Raleigh, NC

When you hit some bumps in life, it can be devastating. After the hard work and wonderful feeling of buying your home in Raleigh, to find your home in pre-foreclosure is a hard place to be. The good news is that pre-foreclosure is not a dire situation and there’s still time to make a change. There’s a straight line to a positive outcome if you take proactive steps.

Getting market price for distressed properties from real estate investors upon reaching pre foreclosure with a lending institution isn’t out of the question.

What is a pre-foreclosure letter

When you miss several mortgage payments, you home can fall into pre-foreclosure. You’ll know that this has happened because your mortgage lender will send you a letter in the mail notifying you that you’ve entered into pre-foreclosure. In all likelihood, you had an idea that this was happening well before the official notice comes in the mail. 

Though this is definitely a serious situation, it’s not the point of no return. Not by a long shot. You have lots of options when that letter comes in the mail before you lose your house. If this is your situation, step back and take a deep breath before you get emotionally involved. It’s a scary situation, but this notice is still early in the process. Above all, don’t panic!

A property owner who is behind because of unpaid taxes won’t be formally foreclosed on for a while. Making backdated payments or working out monthly installments can prevent a home from getting to the sheriff’s sale or public auction. The foreclosure process begins with delinquent payments, but being served with a letter is not the end of the process.

Just the first step in North Carolina

Pre-foreclosure is the first phase of the long and complex legal process that sometimes ends in a piece of property being taken back by the bank. Whether a family is ultimately evicted from their home in Raleigh depends on a lot of things happening in the interim. 

For homeowners in Raleigh who are behind on mortgage payments, the first step in the foreclosure process happens when the mortgage holder files a notice of default with the Wake County Clerk of Court. 

There are set amount of delinquent payments that a homeowner can fall behind with before they get a notice of default. This is set out in the terms of the mortgage. If you’re a Raleigh homeowner who’s in a tough spot, it’s important for you to look over your mortgage paperwork and find out what the terms of the home loan are. 

Judicial foreclosure in Raleigh, NC

brick house with trees in Raleigh, North Carolina

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Before a mortgage holder can move out of the pre-foreclosure stage of the process, they have to go in front of a judge to get approval. The Wake County judicial system doesn’t move swiftly, so that leaves homeowners in Raleigh some time to pull the loan out of default before the house goes into foreclosure

There are four kids of foreclosure in North Carolina:

– Power of sale foreclosure

– Foreclosure by civil action

Tax foreclosure

– Homeowners association/condo owner’s association foreclosure

All four of these kinds of foreclosure in Raleigh, NC are handled in the court system. The last two involve a homeowner being behind on either taxes or fees associated with their home. The first two are done by a mortgage company or bank lender. The North Carolina General Statues make provisions for all four of these foreclosure processes in North Carolina. 

What is a short sale?

Short sale sign in Raleigh, NC

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In all four foreclosure situations in North Carolina, the homeowner has the power to negotiate a  short sale of the home or to go through with a traditional real estate sale or an all cash sale.

A short sale is when the home is sold for less than the amount owed on the mortgage. Though this is a preferable outcome to a full on foreclosure, a short sale often means that the homeowner will still ower money to the bank. Sometimes the difference in the price of the sale and the amount still due on the mortgage is forgiven by the bank, but not always. 

Often, a short sale situation involves a homeowner selling to an investor or a home buying company. In any case, the mortgage lender has to approve the sale of the home under these terms. Homeowners in Raleigh, NC facing foreclosure will need to contact their lender to negotiate these terms. 

In many cases, the mortgage holder will agree to a short sale if the homeowner agrees to a default judgement. This pulls the house out of foreclosure, but the homeowner will still have to make payments on the amount due to the lender. 

Pros and cons of a short sale

The benefit of a short sale is that it keeps foreclosure off of the credit rating of the homeowner. There’s no massive hit to the credit rating either, though there is still a detrimental mark placed in the credit file. A foreclosure stays on a person’s credit report for seven years. 

 It can take up to a year for the whole short sale process to go through, and it takes a lot of paperwork. 

 Fair, all cash offers for houses in foreclosure can also be part short sales. Pre foreclosure means that the mortgage loan is behind, but there’s still lots of time before the final foreclosure sale. The lending institution might still be able to work with a home owner to create a plan for affordable payments for people in financial distress. Short sales are not the preference for most lenders. They’d prefer backdated payments for a home in default status.

Banks don’t like foreclosure

One wonderful piece of news for Raleigh homeowners facing foreclosure is that banks don’t want to repossess your house. When a loan goes underwater and the bank has to sell the property, they lose money. The best outcome for the homeowner and the bank is to come to an agreement to keep you in your house. 

You can work with the bank to arrange a short sale. This allows you to get out with your home equity and them to avoid the costs of foreclosure. Whatever they can do to prevent you losing your house, within reason, a mortgage lender will do. 

Pre foreclosed properties are a top priority for banks. There are also government programs that can help pull a pre-foreclosure property out of the negative.

Options for homeowners in pre-foreclosure

front door of a pre-foreclosed home in Raleigh, NC

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Lenders are generally willing to work with you and negotiate to keep your house out of foreclosure. 

Though the notice of default means that the wheels are turning towards a foreclosure, there’s still plenty of time to get back on track with your home loan. You might be able to catch up payments in a lump sum or to grade them out over time. There’s even the option to potentially refinance your Raleigh house in foreclosure. For that, you might need to get a cosigner or agree to a higher interest rate. 

If you’ve gone into default because of some life circumstance like a divorce, a job loss, or the death of a family member, you should talk to the mortgage company. Life circumstances happen to everyone, and these are usually temporary situations. You can negotiate a loan modification, make backdated mortgage payments, or arrange for a short sale of your house. 

During the COVID-19 pandemic, there were lots of provisions put in place to help homeowners stay out of foreclosure. For government-backed mortgages, evictions and foreclosure proceedings were halted. Though the crisis is past now, there are still government agencies that can help homeowners stay out of foreclosure. 

Is it too late to sell your home in Raleigh?

Selling a pre-foreclosure home in Raleigh is possible if you step into action. All the way up to the final foreclosure auction of the home, it’s possible to strike a last minute real estate sale of the property in Raleigh. 

Mortgage borrowers can connect with prospective buyers to get market value for their home. Short sales are sometimes the only options if you’ve missed payments on your home. Real estate-owned properties are a common, if unfortunate reality in Raleigh, NC.

To avoid foreclosure, either work with a real estate agent or reach out to a home buying company. As soon as you’re behind in monthly payments, it affects your credit history. The outstanding loan balance might seem like a huge hurdle to overcome, but paying down the mortgage balance with a quick, all cash sale can save your pre foreclosure property.

Keep in mind that once the lending bank reaches out to the county recorder’s office, that’s only the beginning. As a property owner, you have a lot of leeway to save your credit score. A foreclosed property isn’t out of the hands of the owner because a default notice is sent out.

Cash home buyers can help Raleigh homeowners in foreclosure to pull out of even the worst situation. 

How to Sell a Property When You Still Owe Money On It

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When you first qualified for your mortgage and bought your home, you were probably over the moon with excitement. Mortgage repayment generally runs from fifteen to fifty years, but in those first few heady days, you likely were more focused on moving in and enjoying your home. 

Eventually, most people have to sell their home for one reason or another, and often that loan is still on it. This might be because of a divorce, a new job, the desire to relocate for retirement, because of an expanding family, the need for more space, or even because of a financial hit. It might be as simple as the realization that the house isn’t right for you. It might be that the neighborhood was rezoned and now there’s a strip mall right behind your back garden. Whatever the reason, the mortgage isn’t cleared and the property needs to be sold.

Most homeowners don’t own their homes

Here’s something you might not know: if you still owe money on your home, you don’t actually own your home. It’s true! Until a mortgage is paid off completely, the lender technically owns the house. Whatever mortgage lender you financed your house through is the legal property owner. 

Legally speaking, a mortgage is the transfer of interest in a piece of real property to secure repayment of money. Your lender is securing the payment of the money you’ve promised to pay back to them through ownership of the property itself.

If a home loan falls into default because of missed payments, they can call up the secured asset; your house. That’s why when someone’s home goes through foreclosure, they are subject to the eviction process just like a landlord evicts a tenant. The lender repossesses the home just as a car lender can repossess a car. The difference of course is that the house can’t go anywhere, so the person living there has to go somewhere. 

The mortgage holder/homeowner relationship isn’t legally all that different than the tenant/landlord relationship. What a strange thing to realize!

The great news is that it’s not cost-effective for a mortgage lender to foreclose on a home. They are much more likely to lose money this way than if they can keep a homeowner in their home. It’s also a better deal for a lender if the house can be sold prior to foreclosure.

If you want to sell your home while owing money on it, the lender will have to sign off on the sale.  

Understand your mortgage payment

Though you might already know off the top of your head the buying price of your home, keep in mind that a mortgage is much more than that. Unlike rent, which is the full cost to live in a house and its straightforward, a home loan has lots of components. 

Mortgage payments include lots of different things.

– Principal
– Interest
– Taxes
– Insurance

The principal is the actual amount of the home. This is where you put equity into the house, where you’re paying down the price of the home. Interest is the fee that you pay the lender for allowing you to use their money. Taxes are the local fees that the government takes. Property taxes are built into every mortgage. 

Finally, there is insurance. Homeowners’ insurance covers damage to the home or accidents that happen to people on the property. That’s included in every monthly payment for every homeowner. Unless you put a significant amount of money into the down payment of the home, you’ll also likely have mortgage insurance to pay. This is a safeguard for the lending company for risky investments.

Principal and equity

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All of this adds up to mean that the full amount of your monthly payment doesn’t go to that sale price that you paid for your home. On the contrary, depending on the interest rate that you pay on your home loan and on other fees, you might end up paying as much as one quarter to one third of the sale price on top of the principal. 

Note that early on in the life of your mortgage, you’ll be paying more on interest and less on principal. The first five years of payments are much different than the last ten or twenty-five in terms of breakdown. 

Equity is the amount of principal that you’ve paid off on your mortgage. The more equity you have in your home, the higher percentage you own rather than the bank owning.  

Determine what you owe

Your mortgage statement will have a breakdown of everything that’s included in your mortgage payment. If you want to find out how much you need to pay the lender to clear the mortgage, you’ll have to request a payoff amount. 

This is a common request that mortgage lenders get all the time. If you have an online platform that you pay your home loan through, you should be able to get a payoff amount through an automated system. This might take a couple of days. The payoff amount is guaranteed for a certain amount of time, usually thirty days. 

Know your home selling options

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If you haven’t paid off your mortgage yet, you can still sell your home. 

Your selling options are all about getting more for your home than what you owe on it. That’s why it’s important to know the payoff amount. 

The lending company wants to know for sure that they’re going to get their money back. That’s really all they’re interested in. If they’re sure that they’re going to get the amount loaned to you back out of the deal, they’re more than happy to allow the sale to go through. 

If you work with a cash buyer, a real estate agent, or a real estate attorney, those experts will be able to tell you what you need to know about selling your property. They can work with the holder of the loan and with a title company to get the closing documents together ahead of the closing date. You might also need a settlement statement or a proof of funds document depending on the regulations in your area. 

Many buyers have ways to make financing work, through a lease option or a contingent offer deal with the person selling their current home. Even if you have a second mortgage or an old house, you might still be able to cover the remaining amount on your loans. Never hesitate to get professional help from a tax expert or a real estate agent if you are unsure of your loan terms or the affect the sale will have on your credit.

You can sell your property with a mortgage on it to a cash buyer or to a buyer with a lender. A seller financing deal can help to satisfy the mortgage lender and pay off the loan balance. It doesn’t matter to the mortgage company as long as they have a guarantee that they’ll get repayment. 

When a home loses value

The real estate market tends to trend up. This is why real estate is considered such a great investment. However, there are always factors that can change that. 

For instance, remember the house with the strip mall from the beginning of this blog? Rezoning and new construction of commercial buildings can reduce the value of a home. Needed repairs, devastating natural disasters, etc. can also cause the price of a home to go lower than the mortgage cost. 

If you’re not able to sell the home for more than the amount owed, sometimes a mortgage holder will allow another buyer to assume the debt under the same terms. They’ll have to meet income requirements and go through a credit check just as if they were qualifying for a mortgage. 

You might also be able to work out a seller-financed deal to cover the mortgage debt. A bridge loan is another option if you can’t reach the mortgage payoff amount with traditional financing. You’ll want to seek out professional help for all of these options.

Selling a house with a mortgage

house with mortgage payments

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How can you sell a property with a loan on it? It’s actually pretty straightforward assuming you can sell the home for more than you owe on the loan.  Closing costs are a consideration, even for sellers working independently of real estate agents. Today’s market is generally favorable to sellers, so a traditional lender is usually more than willing to avoid short sales or foreclosure in favor of a sale.

Once the house is sold, the money from the sale is used to pay the mortgage company the remaining balance. This lets the homeowner walk away and pocket any leftover cash. Most mortgages are structured so that selling your home to a buyer with good credit and a bank to finance their new loan is an easy sell for mortgage lenders.

Having an existing finance agreement on your home doesn’t mean you can’t sell it. It just means working with the right people to help you sell a property with a loan on it.

Understanding the Detroit Foreclosure Process

Individuals facing foreclosure are in a tough situation, no matter how they got to this place. Particularly in the last few years, there’s been a lot of financial strain on working families. While the Detroit foreclosure process is never an easy one to face, it’s important to know what to expect in order to get to the best outcome possible. 

Over the last several decades, Detroit has seen a steady decline in the auto industry. This reality makes the city much more vulnerable to economic decline. Automobile manufacturers, which were the primary employer in the Detroit metropolitan area, have largely moved their production to other parts of the world. This left a massive hole in the job market all over the country, and it hit Michigan very hard. Families lose their homes as a result. Non-auto industry businesses have found themselves unable to cover operating costs.

To address the problems in Detroit, MI, the state government of Michigan and the federal government have both put in supports in recent years to help families who are facing hardship. Though these are not a guarantee that cities in Michigan will be able to totally recover, it is a step in the right direction.

No matter the reason that a homeowner in Detroit is facing potential foreclosure, the answer is to learn what the process looks like and to find out if there is assistance available to prevent foreclosure.

foreclosed house in Detroit, MI
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Wayne County ranks high in foreclosure

Michigan ranks right in the middle of the United States as far as foreclosure rates. The Detroit area is most impacted by people losing their homes. Roughly one in every ten thousand homes was foreclosed on in Wayne County during the last year. That equates to about four hundred and fifty homes across the state of Michigan. 

The economic realities of Detroit and the surrounding areas are a major driver in these rates. As jobs have left the city, there’s been an increase in the number of people who struggled to pay their mortgage or their property taxes. 

The tax foreclosure process is overseen by the Wayne County Treasurer’s Offices. This office is located in Detroit, MI. Neighboring cities within the area are also under the guidance of the Wayne County Treasurer with regard to property tax foreclosure.

Help for foreclosure in Detroit

There was a moratorium on foreclosure across the nation during the pandemic that expired in 2021. The good news is that Wayne County implemented a series of new supports to help people in this difficult situation. County officials have been working with owners in the past two years to increase the number of neighborhood houses that are exempt from tax foreclosure. At the very least the city gives them more information on property tax foreclosure and how to prevent it.

People facing tax foreclosure now have options to spread out their payments over a longer period of time with this new system. This only applies to those who are behind within a reasonable amount of time, around three years. Though this Wayne County program is primarily beneficial to landlords and by extension their rental tenants, it’s nonetheless a potential place for assistance. The current program is an extension of one targeted towards individual homeowners called the Distressed Owner Occupant Extension (DOOE). This is important news for Detroit businesses and families who are delinquent on their tax bills.

Detroit properties are able to negotiate with the Wayne County Treasurer’s Office to bring tax bills from prior years up to date and prevent tax foreclosure. Payment plan options from the Wayne County Treasurer in Detroit, MI don’t lower the price of past due taxes. They do make it easier for owners to retain their property.

Tax foreclosure rates in the Detroit area are particularly high. Penalties are heaped onto homeowners if they get behind on their property taxes. It’s an insidious problem, and it’s critically important that you contact the Wayne County treasurer’s office if you’re behind. Wayne County also has a myriad of financial literacy programs and other places to find support in financially challenging times. 

Basics of the Detroit foreclosure process

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There are four basic steps that a homeowner goes through during the Detroit foreclosure process. 

1. Missed payments & a breach letter

2. Notice of foreclosure

3. Foreclosure sale

4. Deficiency judgment

That sounds simple enough when it’s put into bullet points, but this process takes many months to complete. There are also lots of possibilities for changes along the way, as these things rarely go in a straight line. That’s because families facing hardship are working hard to keep their homes. 

Michigan is a nonjudicial foreclosure state. In most of these proceedings, the courts are not involved. Instead, legislation has put into place state statutes that lay out what rights a mortgage holder and a homeowner have and how the Detroit foreclosure process proceeds. In some circumstances, judicial foreclosures do still happen in Michigan, but these are the exception and not the rule. 

The average foreclosure takes many months to complete. Though there is always a risk of a homeowner losing their property, we must keep in mind that foreclosed homes and vacant lots are not good for the city of Detroit. Everyone has a vested interest in keeping homeowners on their property for the good of the neighborhood.

Federal and state laws protect homeowners and specify what a lender can and cannot do. It’s not good for any party involved for a home to go through the foreclosure process. Everyone loses money when a home sells at auction.  

How many missed payments lead to foreclosure?

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A mortgage must be behind 120 days before a lender can send a breach letter and initiate the Detroit foreclosure process. That’s unless there are extenuating circumstances. For example, if you sell the property to a third party and don’t pay off the mortgage immediately, the lender can call the loan due and start proceedings. This is highly unusual.

A single missed payment doesn’t constitute a breach of the promissory note. Most mortgage lenders give borrowers a fifteen-day grace period with which to catch up on their payments. That happens before they even charge a late fee. Borrowers can check their lender’s website, their billing statement, or their promissory note for the precise grace period that’s in their loan. 

After the third missed payment, the lender will send a breach letter to the borrower. This notifies them that they’re far behind in payments. The loan will be called due unless they do something. 

Michigan foreclosure auctions

A public auction allows the bank to sell the home if there is no payment on it in four months. The bank reposesses the home and puts it on the auction block.

Foreclosure auctions in Detroit are a matter of public opinion, and anyone can bid on the property. Though most people think that the auction is the point of no return, it’s actually not the end of the line. There is a six-month redemption period in Michigan that allows the homeowner to continue to pursue their rights to the property. 

Know that this six-month timeline can be shortened. This is why homeowners should stay vigilant. The homeowner cannot negotiate to get their property back after this step is completed. When a new owner takes control of the property, the homeowner is evicted and physically removed if they haven’t already left.

Up until the final sale of the home to a third party, the homeowner can negotiate new terms and an extension or loan modification to allow for more time. Even the act of submitting the paperwork slows down the Detroit foreclosure process. That’s even if it’s not immediately approved or not approved at all. For homeowners who are unsure of what options they have, it’s a good idea to reach out to a housing counselor for support. 

The lender must inform the homeowner of the date of the foreclosure auction or sheriff’s sale. In fact, the lender must keep the owner notified of all of the steps along the way. 

Takeaways for Detroit homeowners

Foreclosed home in Detroit, MI
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The biggest takeaway for homeowners in Detroit is that there are options available. The road to being evicted from your home is a very long one. You could prevent foreclosure if you qualify for a modification. Being open-minded and flexible is the difference between your family being evicted or keeping your home. You might also be able to pay off the delinquent amount and remain in your home.

There are ways to pull a home out of foreclosure all along the way. Check out options like a short sale to a cash buyer, mortgage modification, or government assistance programs before walking away from a house. As stated previously, the government and the mortgage lender are both interested in bringing the loan current and keeping a homeowner on their property. 

How to Sell a House During Foreclosure

Think it’s too late to sell a house once it’s in foreclosure? Think again. 

A house is the biggest purchase that most people will ever make, and it’s a process that generally takes years of saving and building credit to make happen. Though people tend to think that getting a foreclosure notice means you’re out of luck, the great news is that it’s not the end!

To know how to sell a house during foreclosure, you first should have a grounded understanding of what the whole thing looks like. There is a definitive point at which you can no longer sell your property in foreclosure, but up until then it’s possible to work with a we buy houses company, a cash buyer, or even a traditional real estate agent. Pulling the your home back from the brink gets you back some of the equity you put into it. When you’re in financial trouble, it’s always a good idea to get legal advice for how to deal with a mortgage company.

Types of foreclosure

There are two different types of foreclosure – non-judicial and judicial. These are exactly what they sound like. A court proceeding oversees judicial foreclosure. The lender or other foreclosing party files a lawsuit that starts the gears turning.  In non-judicial foreclosure, the lender follows a proscribed series of steps that are built into the laws of that particular state. 

Some states have both options, and some states only have judicial foreclosure. Generally, one state has one kind or the other that is more common. 

Depending on the state you’re in, you could also be subject to a deficiency judgment. This means that you’ll have to pay the balance of the mortgage after the lender sells the home. For instance, if your home sells at auction for $70,000 but you still owe $100,000 on the loan, then the lender can come after you personally for $30,000.  

Federal laws surrounding foreclosure

Did you know that there is no deadline set in stone for the time between a missed payment and foreclosure proceedings? All fifty states have slightly different processing times. Federal guidelines mandate how long you have to bring mortgage payments up to date before you are in danger of having a piece of real estate foreclosed on. 

United States federal laws protect homeowners from being foreclosed on too quickly. For most homeowners, there is a minimum of 120 days between the first missing house payment and the lender being able to initiate a foreclosure proceeding. That’s roughly four months, and any mortgage payment that you make during those months extends that timeline.

Financial hardship is a common problem that affects many homeowners, who find themselves either having to declare bankruptcy, come up with a plan to pay the balance remaining, or go through the short sale process. Unfortunately, a foreclosed home is not going to go for market value. 

Steps in the foreclosure process

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There are many steps in foreclosure, and it only starts with that official notice that the mortgage lender has moved to start proceedings. Here are five steps in the foreclosure process.

1. Default

The homeowner misses mortgage payments for three months. This is the first step in the pre-foreclosure process and it’s the first red flag for someone facing foreclosure.

2. Notice of default

After 90 days of missed mortgage payments, the lender sends a notice of default to the homeowner. This actually a public notice that gives the homeowner thirty days to catch up the loan.

3. Notice of trustee’s sale

This is where things take a turn towards finality. The lender, in conjunction with their attorney or a trustee, schedules a sale of the property. This sale doesn’t usually happen for two or even three months. 

4. Trustee’s sale

The property sells in this auction. The highest bidder who can meet the requirements of the foreclosure sale will get the property. Note that, depending on the state, offers from competing buyers push the final date of the trustee’s sale out for months before the final sale. 

5. Eviction

When the sale is complete, the homeowner now faces eviction from the home. An eviction notice mandates that the individual leave the property immediately. At the time of the final eviction, a law enforcement officer will often go to the home to ensure that the former homeowner removes all of their belongings and exits the property.

If bids on the property do not reach the minimum amount owed on the mortgage, the property becomes “bank owned” or “real estate owned”, which means that the lender takes possession of the property.

Date of sale is the end of the line

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A homeowner can make an arrangement with the lender to pull the house out of foreclosure all the way up until the final sale date. This means that they can find some way to get the money together to pay off the past due mortgage amount and keep the house, or they can sell the house to another party. 

If a homeowner gets a new job or has some other new stream of income, the lender can work with them to extend the deadline for foreclosure through loan modification to repay the remaining mortgage debt. Keep in mind that it’s in the best interest of the lender to keep the homeowner in the house. Foreclosure generally represents a loss of money and time for the bank. There is no guarantee they will get the full amount of the mortgage on a piece of real estate in a foreclosure proceeding.

Pre-foreclosure specifics 

Cash buyers can pay off the mortgage amount all the way up to the auction date.  Potential buyers are willing to pay cash for foreclosed real estate, which can help to mitigate the negative impact on the credit score of a homeowner facing foreclosure.

Pre-foreclosure goes all the way up to the moment that the mortgage lender actually transfers the deed out of the name of the homeowner who can no longer afford to pay the remaining balance or even just catch up on delinquent payments. Sale proceeds from selling a piece of real estate to a bank or third party will go to pay legal fees and foreclosure costs as well as going directly towards the remaining balance owed to the mortgage lender.

Sharing financial information or writing a hardship letter can make it easier for a mortgage to stay in preforeclosure and prevent an unwanted change in ownership. Even if the homeowner is not able to maintain ownership of the home, in most cases they can at least get a market value for the property.

What is a short sale?

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A short sale is when a homeowner sells the home that they own and the money goes directly to the bank. This kind of sale doesn’t always cover the total amount of the mortgage, and the homeowner can be expected to cover the balance if it doesn’t. A deficiency judgment can be awarded to the lender if the short sale doesn’t cover the amount of the remaining loan on the property. 

Working with a real estate agent or an attorney can help you to navigate a short sale, and it’s possible to save money when you avoid foreclosure with this method. 

Once a person decides to go for a short sale to avoid foreclosure, then they have to find a buyer for the home. A real estate agent can help to find a potential buyer, or we buy houses companies can let you know what options they offer for getting a short sale on a home. Getting a cash offer for the price of the mortgage is a great way to avoid foreclosure. 

Remember, with a short sale to pull the homeowner out of foreclosure, only expect to get back the money owed on the home. 

Work with your lender to avoid foreclosure

Just as a homeowner worked closely with their lender to get the original loan on the home, so too must they work closely with their lender to pull the home out of foreclosure through a short sale. Be careful about giving too much personal information to the lender, however, as this can be used against the homeowner in the case of a default.

Reach out to your home lender to find out what options you have to sell your home during foreclosure. They have much more latitude than most people realize to alleviate foreclosure. A great short sale can be a much better solution for a lender than sending the property to auction! 

The bottom line here is that if a lender agrees to stop foreclosure because of a solution to sell the house fast, as is, and at a fair market price, then both the homeowner and the mortgage lender come out on top. The foreclosure process can be intimidating, but it doesn’t have to end badly.