Do you need foreclosure help? Did you know in 2019 over 600000 foreclosures were filed?
Uncertain economic conditions are putting increased pressure on homeowners with mortgage defaults at the highest levels since 2008.
Don’t become a foreclosure statistic. Here are some real strategies to stop the foreclosure process.
Introduction to the Foreclosure Process and how to stop Foreclosure.
It takes just 3 missed payments on your mortgage and your bank will start to file for foreclosure. However, after the bank has filed for foreclosure, you still have many options to stop the foreclosure. Here we discuss some foreclosure help strategies for you. Read these carefully, consult with the appropriate professionals then move forward and stop the foreclosure process on your house.
We will also talk to a real estate investor from Denver Colorado briefly about how they help people stop foreclosure.
“We buy Denver foreclosure houses often” stated Michelle…
She continued “Buying homes that are in foreclosure requires a great team to ensure everything is done correctly. Attention to details and timelines are very important. When done right it’s great because the home-owner doesn’t lose everything. They actually sell their house, pay off the mortgage, keep the difference and then can start the next chapter in their lives.
Amy T, a private lender also based in Denver, contributes how a lender approaches these situations. Denver laws may be slightly different however real estate investors that are experienced all follow the same helpful processes to stop foreclosures for you. So whether you are in Denver, Lakewood, Aurora, Indianapolis, or any other city this guide to stop foreclosure is a must read.
Let’s get to it!
Stop foreclosure through discussions with your lender.
The first thing you can do is work closely with your lender to stop the foreclosure. It is quite possible to stop the foreclosure before the auction as lenders generally want to work out a compromise instead of taking your house from you. This is simply because it costs a lot of time and money for the bank to foreclose on a house.
Amy T, who works for a private lending firm in Denver, CO said “We do like to give our customers the chance to work through difficult times. We are committed to Denver, and the surrounding communities. Other local lenders are too so call them sooner than later. Give them a chance to help you out. The worst they can say is no, right?”
- PRO: You get to keep the house as you stop the foreclosure by renegotiating the mortgage
- Negative: The bank may not allow you to negotiate if you are too far behind.
- Negative: Your monthly payments could potentially go up to play catch-up.
Stop a foreclosure through a short sale.
The second thing you could do to stop a foreclosure is to do a short sale. A short sale is when you come to an agreement with the bank to sell the property for less than what is owed. This will stop foreclosures instantly. All of the money will go to the bank however the remaining balance will be forgiven. Obviously with a short sale you do stop foreclosure however you do not get to keep your home.
- PRO: You stopped the foreclosure.
- Negative: You walk away with nothing.
You could file for bankruptcy to stop foreclosure.
Filing for bankruptcy is a 3rd option. Filing for bankruptcy stops the foreclosure completely. Once you file for bankruptcy federal law stops any collectors including your bank from continuing to process any collection of debt or continuing with a foreclosure. Once you file for bankruptcy you then enter the court system. The courts will mediate between you and your lender and typically a restructuring of your debt is organized. This involves creating a payment plan. The court does require your bank to work in good faith to come up with a reasonable repayment plan to help you get back on track. It’s very important when filing for bankruptcy to stop foreclosure or for foreclosure help that you use a bankruptcy attorney.
- PRO: You get professional foreclosure help and the foreclosure will stop once the court agrees.
- PRO: You can keep your house:
- CONS: Your payments could in fact go up.
- CONS: Other house maintenance expenses remain.
A deed in lieu of foreclosure is another way to help stop the foreclosure.
A deed in lieu is when the homeowner who wants to stop foreclosure gives the house to the bank. So the homeowner needing foreclosure help signs the deed of their home back to the bank voluntarily. This will stop foreclosure instantly, but the bank has to agree to take the house back from you. Maybe the bank can’t make the repairs or doesn’t want to make the repairs. Maybe the bank doesn’t want to take the house on because then they would need to sell the property. Sometimes the bank will allow you to do this to stop foreclosure and sometimes they will not. This sounds like it could be a great option but actually it still has the same impact on a homeowners’ credit score. The homeowner will also lose their house.
- PRO: You stop the foreclosure.
- CON: negative impact to credit score.
Stop a foreclosure with a lease option or subject too.
Lease option is another way to stop foreclosure. Lease options are growing more popular. Another similar process or term is “subject to”. Lease option or subject to is when the homeowner facing foreclosure sells the property to a buyer who buys the property subject to the current mortgage. This means the new homeowner who just bought the house now is responsible for paying the mortgage. This can be a great option for the homeowner and the new buyer as it is relatively simple.
- PRO: SImple and easy process that allows you to quickly stop the foreclosure as the new owner is now paying the mortgage.
- CONS: You no longer own the house however you so still have great credit.
Stop foreclosure by Selling Your House Fast to an Investor.
Another option to stop foreclosure is selling your house for cash. Selling your home to a real estate investor, despite what real estate agents say, can be a really good option. For example – let’s say a real estate agent will sell your house for $300000. After closing costs and fees you will get $270,000. Now you also have to consider how much you have to spend to get it in shape to sell. New kitchen? $10,000! New Roof $12,000? Who knows. When selling on the MLS home buyers expect your house to be perfect. Getting it this way costs more than most people realize.
So after closing costs you got $270,000 but maybe you had to do $25,000 in upgrades. Now you really only got $245,000.
Another thing agents dont always fully explain is it takes a long time to sell a house. First you have to get it ready, 1 month. Then list it, 1 month. Get under contract, 1 month. Negotiate and wait for the inspection, the home buyers financing, other red tape etc 2-12 months. Add this up and it can easily be 6 months or more than a year.
When selling to a real estate investor they will buy your property as is. This means you do not spend thousands or tens of thousands repairing your house just for someone else to enjoy it. Also the real estate investor will already have money to purchase the property lined up. So if you want a fair price and you need to sell your house fast then talking to a “WE BUY HOUSES company” could be the right choice for you.
Just because you’ve missed a few payments in the bank is threatening to take your home you can stop foreclosure proceedings. You need to do some research to find out which bit is the best option for you. A great resource to talk through all these options is a real estate investor. Of course they will be wanting to purchase your home, however they typically have a wealth of knowledge. We recently spoke with Shaun, a real estate investor in Denver, Colorado. “We buy houses in Denver from people facing foreclosure regularly. We take phone calls and answer even more questions. We are happy to highlight options that people have. We buy the houses as is and we close on them quickly to stop foreclosure proceedings. This is a really great option as now the homeowner that was facing foreclosure does not have a bankruptcy on their credit report. It is also a great option as they can walk away with cash if they had equity in the property.”
Shaun has been investing in real estate since 2008 and is currently focused primarily on working with a Denver real estate investment company Watson Buys. We Buy Houses from people with a WIN WIN mentality. For us to buy your home it must be a good deal for YOU and the team at Watson Buys.
A key focus for the Watson Buys team is to provide every potential client with all options available to them. For example when facing foreclosure we provide them with information about short sales, bankruptcy, and selling to a cash home buyer.
“Writing on various topics has become of great importance to me” stated Shaun. “If just one person finds something useful in the thousands of words I try to get out there each month then I would be really happy.”