Avoid Home Foreclosure
Homeowners: Are you facing Foreclosure?
Are You Behind on payments?
Are you in Pre-Foreclosure?
Are you in a Redemption Period?
What happens if I am in default on my loan?
Even if you are just one month late on your payment, the bank has the right to call the entire loan due, also called “accelerating the mortgage”.
When a lender decides to accelerate the loan that means they are demanding payment IN FULL on your entire note. If your debt problems are severe, the mortgage holder will take steps towards foreclosure. If you don’t pay to reinstate or pay the mortgage in full, the mortgage lender will proceed with the foreclosure.
What is a note and a mortgage…what’s the difference?
A note is your promise to pay that you signed when you purchased your home. The mortgage secures that promise, using your home or other real estate as the collateral. When someone mortgages their property, they are conveying an interest in their property as security for payment of a debt.
How does a Foreclosure proceed?
There are a few steps in the process of Foreclosure. If you fall behind over 90 days on your payments, you may receive a Notice of Default.
The Notice of Default will usually notify you how much you owe in principal and interest payments and how is required by the mortgage company to be caught up on your payments, and make your loan current.
If you have received a Notice of Default - CALL NOW, DO NOT WAIT!
What is the foreclosure time frame?
Grace Period - During the grace period, using 1-3 months, the bank will start sending you letters, they will be friendly reminders at first, and then they will start to become more threatening... This is the best time to bring the mortgage balance current again. As time passes, it gets more difficult each month to catch up in full.
30 Days late – If payments are 30 days late payments that can add late fees and service charges added to your payments in order to catch up. Paying a double payment and the added fees will resolve the situation. Or, refinancing may be the best option.
60 days late – If two payments have been missed, there are more fees and charges with two late payments which continue to accrue interest. Refinancing is probably the best option. A refinance or 2nd mortgage can lower your payments, pay off some debts, collections and/or liens to make it possible for you to continue making your payments on time and keep your home.
90 days late - This is a serious delinquency, more fees and likely very difficult to find a lender who will refinance your house or consolidate your debts.
120 days late - You may be confused about your options and fearful of making a bad decision. If you take action now you still may be able to receive help. There are likely no lenders willing to refinance at this point and if they are willing, will want high rates and a lot of equity.
150 – 180 days late - In most cases, a notice of Sheriff’s Sale may have arrived. Your chances of recovering are very slim in reinstating the loan and saving the property from a forced sale and repossession.
What Can I Do?
There are options when facing foreclosure:
Reinstate the Loan: If the mortgage lender hasn’t accelerated the loan, you may be able to prevent foreclosure simply catching up on all the missed payments, taxes, insurance, any attorney fees plus accrued interest.
Refinance: You may need to refinance the entire balance of the loan to prevent foreclosure and repossession. When you contact us, we can discuss this option and provide mortgage lender referrals. However, the longer you wait, the harder it will be find a lender willing to refinance your existing mortgage and accrued debt.
Sell the Property: Your best option may be to sell. If you can sell BEFORE the Sheriff’s Sale, pay off the mortgage, attorney fees and late fees, you may be able to save your credit. At the very least, you will have avoided a foreclosure on your credit allowing for a faster rebound. With good credit moving forward, within a year, you may be able to qualify for a new mortgage and buy a new house. However, with a home foreclosure on your credit report it will take several years and perfect credit afterwards to qualify for a new mortgage.
If you owe more than what your house is worth and you cannot make up the difference, the lender may agree to take less – this is called a short sale. Short sales do require some time to find a buyer and obtain an approval with your mortgage lender as short sales are not guaranteed.
It can take several months to find an interested, qualified buyer and get to the closing table. If you have already received a notice of foreclosure, you might not have enough time to sell the traditional way with an agent or via short sale, even at a discounted price.
“Refinance or Sell”
You may wonder, how can Summit Home Solutions help? We have relationships with several lenders in the mortgage industry, and have some willing to work with tough financing situations. Also, we are real estate investors and we work with a number of others who buy houses.
If you have enough equity and time, refinancing may be a possibility. Keep in mind the interest rates are usually much higher and there are fewer lenders that are able to refinance in a distressed situation. If you feel that a refinance is the best option for you, we can connect you with a lender immediately.
If you think it is time to sell quickly, we might be the solution you are looking for. We have several programs that have worked very well for people in foreclosure. We are able to work with mortgage lenders and creditors, stop the foreclosure and in many cases, help save your credit.