The foreclosure process can move quickly, so it’s important to know what a foreclosure notice means and what you can do to avoid foreclosure before it’s too late. There are options to help you get out from under the danger of foreclosure, salvage your credit, and possibly save your home. Let’s start with what a foreclosure notice is and take a look at some possible solutions.
What does a foreclosure notice mean?
If you’ve received a foreclosure notice, it means you’ve likely fallen behind on mortgage payments and your bank is taking action to collect on the debt. Your lender doesn’t need to sue you in court to begin the process, a foreclosure notice is to let you know that it has begun.
If you haven’t received a foreclosure notice yet, you can talk to your lender about repayment options including refinancing, deferment or reduction of payments, or a new payment schedule that better suits your needs. You should take advantage of any options your lender can offer that will help you pay your bills because once the foreclosure process begins it is difficult to stop.
If you’re worried about foreclosure, don’t lose hope yet. You can still avoid losing your home or find a creative solution to resolve your debt.
How much time do I have before I lose my home?
When you receive a foreclosure notice, you still have time before you have to worry about eviction.
To move the process forward, your lender must publish the upcoming sale of the house in a local paper for at least four weeks. At the end of this period, your lender can sell the home to the highest bidder, which is usually the bank itself. You can continue to live in your home at this time.
After the house has sold, you have from six months to a full year to pay off the mortgage and keep your home. This is known as the redemption period. Most people are given six months because they still owe 60 percent or more of the total balance. If you owe less than that you may be allowed a whole year to pay the remainder of the mortgage.
The redemption period is your legal right to pay off the loan completely in order to avoid forfeiting the home. You still have a right to live in your home during this time, but you must continue to maintain it. If an inspection (by the new owner or bank) finds serious damage or neglect of the property they could evict you sooner.
What happens if I do nothing after receiving a foreclosure notice?
The foreclosure notice should be posted in an obvious location on your property and include the following details:
- Names of parties involved: borrowers, lender and foreclosing agency
- Date mortgage was due and amount owed
- Length of time to repay debt (redemption period)
- Statement that borrowers are responsible for any damages or neglect to property
After issuing the foreclosure notice, the lender will continue to list the home for sale in a local newspaper for at least four consecutive weeks. At the end of the four weeks, if a buyer is not found, the lender will hold an auction and the home will be sold to the highest bidder.
Once a buyer has been found, the borrower is given a final allotment of time to pay off the debt. This is the redemption period. If they cannot pay back the mortgage by the end of the redemption period, the property is forfeited to the new owner and all occupants must move out of the home.
What can I do to avoid foreclosure?
If you’re ready to get out from under your mortgage debt and move forward, you still have options. A foreclosure notice is not the end of the line. Here are a couple of solutions that will stop the foreclosure process:
Pay back owed taxes
Once the housing loan is in default, you must pay back the whole debt in order to stop foreclosure. Paying the mortgage in full will settle your account, the foreclosure will be stopped, and you can continue to live in your home.
Unfortunately, this is not an option for most people. If you were struggling to keep up with payments before you were given a foreclosure notice, paying off the total mortgage might not be the best option for you. If you can’t afford to live in your home, sell it!
Sell Home to Avoid Foreclosure
Selling your home is a great way to avoid foreclosure and the damage to your credit that comes with it. If you can no longer afford your mortgage, sell your home to get out of debt and find a more sustainable living solution. You can sell your home yourself up until it is sold at auction. This means any time before you receive a foreclosure notice and for a limited time after.
Selling Your Home in a Short Sale
Selling your home in a short sale can be a possible solution to avoiding foreclosure. In a short sale, you sell your home for the highest amount you can to pay back as much of the mortgage as possible. You can ask your lender to forgive the difference by requesting a waiver of deficiency. To sell in a short sale, your lender must be open to the idea and approve the final sale. Your lender might consider this option because it helps them avoid the hassle of preparing your home for sale and going through the traditional sale process.
Selling to a Real Estate Investor
To sell your home to avoid foreclosure, you could work with a real estate agent and list your home on the market. However, traditional sales take time. You not only have to make repairs and updates to prepare your home for sale, you have to wait for a buyer and go throughout the closing process. If you want to sell your home quickly and resolve your debt quickly and painlessly, your best bet is selling your home to a reputable real estate investor. They can give you the most valuable help for your time and unique financial needs. Here’s why:
- You can sell your home as-is, no repairs needed.
- An investor will give you a fair price for your home – comparable to traditional sale but without the hassle.
- You can close the sale in as few as 5 days.
- A real estate investor can work with your lender to help you out of your debt and on with your life.
Once your home is sold you can move on and forget your foreclosure worries. You will leave your home behind but on your own terms and can avoid the credit drop that comes with foreclosure, making it easier for you to build back good credit and get back on your feet.
If you’re worried about foreclosure, Renewed Homes can help. We specialize in creative financial solutions that are designed to help you build back your credit and avoid foreclosure.
Give us a call at (269) 362-0931or reach out online right away.
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