Home foreclosure is a painful process that can involve an entire team of professionals, including realtors, lenders, bankers, and lawyers. As a homeowner, negotiating the process with so many entities is, at the very least, an overwhelming task. Your best chance of resolving a foreclosure without ruining your credit score or ending up without a home is to utilize those who are deeply familiar with the foreclosure process.
Real estate lawyers and realtors specializing in foreclosures can help homeowners avoid losing their homes or assist them in transitioning to an acceptable alternative. We wanted to find out what options were available for homeowners facing foreclosure. Real estate lawyers and realtors have helped outline your best options for keeping your home and maintaining your credit score.
Check back later in the week for a comprehensive article on avoiding foreclosure!
How Can I Protect Against Foreclosure?
When foreclosure threatens, what are your options for keeping your home?
Is there a way to protect yourself legally?
When is it smart to concede to a foreclosure?
Can a realtor or real estate lawyer help prevent foreclosures from happening?
What about taking advantage of foreclosed houses?
Are there any legal requirements for buying a foreclosed house?
"Trying to navigate your way around a foreclosure without an attorney is like doing open heart surgery on yourself. It’s also like bringing a knife to a gun fight. It’s never smart to concede to a foreclosure. Borrowers have options, especially in this climate of robo-signing, lost documents, mortgage backed securities and the nation’s financial crisis.
So What are your options:
A. Mortgage Modification
It’s possible to keep your home with some terms of your loan modified. Lenders can adjust the interest rate and payment, and in some cases the principal amount of the loan in order to keep you in your home while receiving some payment on the loan.
B. Short Sale
If you don’t want to stay in your home, but want to avoid the exposure of the underwater mortgage balance, lenders can agree to a short sale, where you sell the home to a third party buyer for less than you owe. You want to make sure that the bank discharges you from the debt on the note, irrespective of what the bank sells the home for. This is sometimes referred to as a “deficiency waiver”. Otherwise you could owe the difference in the amount of the balance and what the buyer paid for the home.
C. Deed-in-Lieu of Foreclosure
A deed in lieu requires that you deed your interest in the home back to the bank in lieu of the bank having to proceed with a foreclosure action and foreclosure sale. You also want to make sure that the bank discharges you from the debt on the note, irrespective of what the bank later sells the home for. Again, this is referred to as a “deficiency waiver.” You want to make sure that your obligation to the bank is fully resolved once you sign the deed.
D. Forbearance of Payments
In some cases, you only need a limited amount of time to get your finances back together. Banks might give you a brief “payment holiday” in order to get your finances back in order.
Whatever your goal is in foreclosure, it’s vital that you don’t ignore the lawsuit. You have options but those options can be lost if you don’t preserve your rights with the court in a timely manner." read more
"The worst thing you can do is nothing. Usually once you’ve been served you have between 20-30 days to respond to a foreclosure. Sometimes when people get served, and they see an unfamiliar lender’s name on the documents they ignore it, or they think they have no chance, so they just give up right there on the spot.
If you don’t fight, you have no chance, plain and simple. You’ll get a clerk’s judgment against you and then you’re screwed. You should never EVER leave your home until the deputy is at your door to kick you out. Stand your ground and engage the banks. There are still plenty of missing or fraudulent documents turning up in our cases, even post-servicing settlement.
It is imperative that every homeowner make the bank prove that they own the mortgage, and that they have the legal standing to foreclose on you. If you engage the banks, you will suddenly find you have options that were not previously presented to you. Even if you do end up losing your home, fighting your case will give you time to put aside money, so you can get your life back on track." read more
"A Realtor can prevent a foreclosure from happening by listing the property and selling it in a short sale. As long as you have enough time this is a great option to foreclosure and I will explain why.
Homeowners looking to stop foreclosure have opportunities. One of these opportunities is a short sale. One of the primary reasons to explore a short sale is to save your credit. In most cases if this is possible, it is something one certainly should pursue. Let’s look at the facts:
Foreclosure: Stays on your credit report for 10 years or more & remains a part of public record forever.
Short Sale: Is NOT reported on your credit history. There actually isn’t a specific reporting item for ‘short sale’. The loan is typically reported ‘paid in full, settled’. Your may or may not see the late payments on your report though but you won’t see “short sale”
Foreclosure: A credit score can be lowered 250 to 300 points in the event of a foreclosure. You can expect your score to be affected for over 3 years.
Short Sale: If a short sale is successfully orchestrated on your home only late payments on your mortgage will show (as it is now). After the sale the mortgage will be recorded on your credit score as “paid or negotiated”. You can expect your score to be lowered by 50 points. A short sale’s affect can be as brief as 12 to 18 months. (Information from http://www.cdpenow.com)
Choosing to get a Realtor involved and letting them assist you sell your home in a short sale vs. letting it go into foreclosure can save you points on your credit report & years of bad credit." read more