The House Navigator
THE EXPERT IN FORECLOSURE SOLUTIONS.
Facing foreclosure? Discover how to regain control and navigate your way out of foreclosure.
What is a Pre-Foreclosure?
Definition
Pre-foreclosure is the first step in the foreclosure process. At this point, the homeowner is at risk of losing the home through the foreclosure process.
Demand Letter
Prior to initiating the foreclosure process, the lender must send a demand letter requesting the payment of past due amounts which gives the borrower twenty days to pay past due amounts.
Notice of Default
After the twenty-day notice period, a lender will typically send a notice of default (NOD) to the homeowner after the fourth month of missed payments. The NOD is filed in with the county clerk in the county where the property is located and posted at the courthouse. The NOD states the trustee’s election to sell the property which is collateral for the loan.
Length of Time to Foreclosure
Depending on the timing of the various required notices, it usually takes approximately 60 days to conclude an uncontested non-judicial foreclosure. Foreclosure sales must take place on the first Tuesday of each month, even if the date falls on a legal holiday.
What if the Property isn’t Sold
If the property isn’t sold at the foreclosure sale, the lender owns the property which is then referred to as an REO or Real Estate Owned property.
Options for Homeowners
LOAN MODIFICATION
Negotiate with the lender to adjust the terms of the mortgage, such as lower interest rates or extended repayment periods.
SHORT SALE
If you owe more than what the property is worth, and your lender allows it, you may qualify for a short sale thereby avoiding foreclosure.
FORBEARANCE
Your lender may be able to arrange a repayment plan based on your financial situation or provide a temporary reduction of your payments (i.e., a grace period).
BANKRUPTCY FILING
Explore the possibility of filing in a US District Court for bankruptcy to avoid foreclosure.
DEED IN LIEU OF FORECLOSURE
Voluntarily hand over the deed to the lender in exchange for avoiding the foreclosure process.
LIST HOME ON THE MLS
Let me be your dedicated REALTOR and list your home for sale on the MLS.
Impact on Homeowners
1
EMOTIONAL TOLL
The foreclosure process can be a deeply stressful and overwhelming experience which can result in anxiety, depression and a sense of failure.
2
FINANCIAL CONSEQUENCES
Missed payments, fees, interest and the potential loss of your home can have a severe impact on a homeowner’s credit and financial stability. This will affect credit scores making it more difficult or, for a number of years, impossible to obtain loans or credit.
3
LIMITED AMOUNT OF TIME
As soon as the NOD is filed and the foreclosure process starts, homeowners are racing against the clock to stop their home from being foreclosed on.
SHORT SALE FAQ'S
Q. What is a Short Sale?
When a homeowner owes more on the property, including all liens, interest and penalties, than it is worth and meets certain criteria and the lender agrees to take less than what is owed on the loan as payment in full, the home can be sold in a Short Sale.
Q. Why Should I Consider a Short Sale?
A Short Sale happens in the pre-foreclosure stage of the process. If the Short Sale is successful, the homeowner escapes foreclosure and the resulting hit to their credit is often less than if the home was foreclosed on.
Q. What Does a Short Sale Cost?
A Short Sale doesn’t cost the homeowners anything. The lender will pay all fees associated with the Short Sale including closing costs and real estate commissions.
Q. How Does My Bank Benefit by Allowing The Short Sale?
Simple. It is expensive for the lender to foreclose on a home and then to maintain the home. Some of the lender’s costs could include legal fees, insurance, taxes, eviction costs, selling costs, utilities and other carrying costs. On average, it can cost as much as $50,000 per foreclosed property. Lenders are in the business of loaning, NOT owning!
Q. How is a Short Sale Different From Foreclosure?
A foreclosure will stay on your record for 8+ years. With a Short Sale, you may be able to purchase your next home after 2 years.
Q. We have a 2nd Mortgage. Am I Still Qualified for a Short Sale?
YES! Both of your lenders will need to have their debt satisfied, at least in part, to get approval to move forward with a Short Sale. Negotiations are inherent in the process, and I can help with that! Most Short Sales do involve more than one lien holder.
Q. Why Short Sales Fail?
There are many reasons why a Short Sale might fail including, but not limited to, the following:
- Incomplete Short Sale package
- Not enough time to close
- Inexperienced Short Sale listing agent
- Junior liens that won’t settle
- No release of debtor’s loan deficiency
Q. What is the Impact on Credit of a Short Sale vs. a Foreclosure?
A Foreclosure appears as such on your credit report and can lower your credit score by 200 to 400 points. A Short Sale appears as a “settled debt” on your credit report and can lower your credit score by quite a bit less – typically 50 to 130 points.
Why is a Short Sale considered a Win-Win for both the Lender and the Homeowner?
For lenders, a Short Sale means they don’t have to take back the property and spend 20-30% of the home’s value in carrying costs. They consider a Short Sale better than no sale in many circumstances! For a homeowner, a Short Sale can provide both the financial and emotional relief they need – allowing them to have a to have a chance at a fresh start!
Remember, you're not alone. I can help you navigate this challenging time and find the best solution for your unique situation.
~Kathy Hale CDPE,SFR
REALTOR and Foreclosure Expert
Phone
1-512-773-7149