Can You Avoid Foreclosure?
How Monica Stopped Foreclosure on Her House
Are you going through hard times? Do you feel burdened with financial difficulties? Maybe you can relate to Monica’s story.
Monica from Capital Heights lived in a home she had inherited from her father 10 years ago. The house had water issues in the basement. On top of that, Monica had fractured her knee cap several months prior and had been on disability since. She was finding it increasingly difficult to stay current on her mortgage and foreclosure was scheduled in early January. Monica felt a great deal of stress and anxiety and, not surprisingly, was having difficulty sleeping.
First, She Called a Realtor®
Following a disappointing conversation with a real estate agent, Monica called Express Homebuyers one afternoon in mid-December after finding the company through a Google search. She wanted to learn more about their home selling process.
During her initial phone consultation with home buying specialist, Ray Falchek, Monica learned about Express Homebuyers’ easy, three-step process. Ray asked her questions about the condition of her house. Then once he established that Express Homebuyers would be able to help her, Ray set an appointment to come out to the house. Monica felt a small a sense of relief because she thought, “Maybe I’ve found someone who can help me out of this predicament.”
When Ray visited the property, he saw the severity of the water damage in the basement. Additionally, he realized the extent to which the entire house needed updating. Monica was worried Express Homebuyers wouldn’t be able to help her after all. And they were her last hope to help her avoid foreclosure. She asked Ray to pray with her.
Ray returned to the office and discussed the situation with the team. As it turned out, Express Homebuyers was able to satisfy her mortgage and tax obligations, plus put additional money in her pocket for a fresh start. Upon hearing the news, Monica fell to the floor in tears of joy. She hugged Ray as the weight of the world lifted from her shoulders. Finally, she had achieved peace of mind!
Foreclosure Prevention Measures
Few things are more devastating to families than the prospect of foreclosure. You own your home and you love it — it serves you well. Yet, due to unfortunate circumstances, foreclosure may seem imminent.
For people facing foreclosure, the stress can be almost unbearable. Worse yet, the foreclosure process can take months or even years, stretching out the pain for longer than anyone wants. If you’re in a similar financial situation to Monica’s and are hoping to avoid foreclosure, you might wonder if there is anything you can do about it.
Here are five foreclosure prevention measures in you can take to stop foreclosure. Because these foreclosure prevention measures might not all work in your situation, do your homework and make the decision that works for you.
1 – Pay off your mortgage. The quickest and easiest way to stop the foreclosure process is to pay off your mortgage. After all, this is what the bank wants in the first place. So they would be happy to let you stay in your home if they get their money back. Admittedly, this is not always possible, and is perhaps the reason you’re in foreclosure in the first place.
2 – Work out a deal with your bank. This strategy is called a “foreclosure workout”. In a foreclosure workout, you’ll sit down with your lender and tell them that you don’t think you can pay your current mortgage obligation but you’d like to figure something out so you can stay in your house and continue to pay your mortgage.
Contrary to popular belief, lenders don’t want to foreclose. They want customers who pay their mortgages, so lenders are often willing to work with homeowners to figure out a deal. This might include a temporary reprieve on your mortgage payments, or it might include a catch-up strategy where your outstanding mortgage payments are spread out so you can catch-up and pay them off, or it might include a restructuring of the outstanding amounts that you owe. Just make sure the deal you agree on works for you. You don’t want to repeat this scary foreclosure process again.
3 – Do a short sale. A short sale is when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding mortgage balance with the bank. Good things about a short sale are it keeps a foreclosure from impacting your credit score and it gets the bank off your back. Short sales are the preferred method for people facing foreclosure because it is proactive, fast and effective.
It’s proactive because you’re taking matters into your own hands. You may also find this option to be a major anxiety eliminator because so much of the stress of foreclosure comes from the process being completely out of your control.
It’s fast. In some cases, you can sell your home in only a week.
It’s very effective because a short sale can virtually wipe out the amount you owe on your mortgage. If there is a balance left over and not covered by the sale of the property, you will still be responsible for it, (although sometimes you can work out a deal with your lender).
With a short sale, you still end up having to leave your home, but the bright side is the impact to your credit is much less than it is if you go through a bankruptcy or foreclosure.
4 – Give your deed in lieu. A deed-in-lieu-of-foreclosure basically means you hand over the deed to your house to the bank and they agree not to put you through foreclosure. This option often only works if your house is worth approximately the amount owed on the mortgage. If the house is worth less, the bank will still come after you for the difference.
5 – File for bankruptcy. Filing for bankruptcy may seem like an extreme measure but it is one of the “tools” in your foreclosure avoidance toolbelt. When you file for bankruptcy, you indicate to all of your creditors that you are no longer able to pay your bills. Filing for bankruptcy will put a stop to the foreclosure process because all creditors must stop the collection process.
This step, though, is a little extreme. Filing may require you to sell off some of your assets in order to pay off your creditors. And a bankruptcy will remain on your credit score for many years, which could impact everything from getting a loan to getting a car, even getting a job. So this shouldn’t be your first line of defense.
Given all these measures, if you can afford payments and you want to stay in the house, a foreclosure workout arrangement (option #2) is probably your best option. If your situation doesn’t allow you to do that, consider selling your home, paying off your mortgage, putting everything behind you and moving on with your life.
Express Homebuyers specialize in helping homeowners who are in difficult financial situations avoid foreclosure. Call us today at [dynamic_phone] for a no-obligation cash offer.
Bank of America photo credit: Mike Mozart of TheToyChannel and JeepersMedia on YouTube
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