With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process from pre-foreclosure to a foreclosure auction.
What is pre-foreclosure mean for homeowner if you live in Washington DC?
Many homeowners across America and Washington DC are facing difficulties making their monthly mortgage payments.
When a homeowner misses 3-6 months of mortgage payments, the lender will issue a warning notifying the homeowner to pay or they will lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current on their payments, but of course this number can vary by the bank and situation.
. If a homeowner fails to make the necessary payments, the bank will foreclose on the home and assume ownership, assuming the bank isn’t out bid by another bidder, evicting the homeowner. Thankfully, during this stage of the foreclosure process, the homeowner has an opportunity to take advantage of several options to prevent losing their home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important to note that this is in public records, but don’t panic!
- You have options that can delay or even prevent the loss of your home: If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, lowering the monthly payments. Check with your local Washington DC mortgage broker or contact us and we can connect you with a reputable one.
- You may be able to quickly sell the property to a real estate investor with a good reputation in Washington DC (like us at Express Homebuyers), and use the cash acquired to pay the months of back payments you owe. We can buy your Washington DC area home quickly, often in just seven days, will pay you in cash, and relieve your stress of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you sell your home for less than its estimated market value and the bank takes the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may qualify to refinance your house through a government program called HARP. If you are current on your mortgage payments, you may be able to refinance through HARP (Home Affordable Refinance Program).
- You may be able to declare bankruptcy, which can buy you time to pay your debt and avoid a foreclosure auction, but it will remain on your credit report for years and can cause significant damage.
Lenders are very aware of the widespread financial troubles across the country and they’re willing to work with borrowers most of the time.
If you’re honest and communicate with your lender, you’ll often find there are options allowing you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for up to seven years, so be very conscientious if you’ve received a Notice of Default from your lender.
If you’re not able to find a solution working directly with your lender, connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Washington DC area house – We buy houses in Washington DC and surrounding areas and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- Feel free to ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This advice will not cost you anything and there’s absolutely no pressure or obligation – just free guidance without a catch.
If you’re in the pre-foreclosure stage, you’ve still got time to fix this situation.
Just contact your bank to see if they’re willing to work with you or contact us if you’d like to discuss selling your house to us or if you want to use our free foreclosure resources.