A process that can take from a few months to up a year or more, foreclosure occurs when a homeowner is unable to make their mortgage payments. After they miss at least one payment, the lender (usually a bank) begins foreclosure proceedings.
Proceedings may vary by state, but essentially the lender begins calling and issuing notifications. These include demand letters, notices of default, a publication of debt, and other communications. Generally, these occur once a homeowner is 30 days past due. If not addressed, the foreclosure proceedings eventually lead to the lender seizing and selling the property.
When the average homeowner buys a home, foreclosure is not usually something that crosses their mind. However, life is anything but predictable, and many people face foreclosure for a variety of reasons. The most common include:
- Being fired/ job loss
- Being demoted or denied a raise
- Death in the family
- Major home damages/unexpected maintenance expenses
- Unmanageable debt
- Medical emergency or illness
Whatever your situation, the foreclosure process does take a decent amount of time, giving you room to decide what to do. Here are some measures you can take when facing foreclosure.
As difficult as undergoing foreclosure is, ignoring it will only make matters worse. Take the time to discuss your situation with spouse or family. Being patient, honest, and open about the facts will help get everyone on the same page in terms of addressing this problem you’re facing.
If you want to try and save your home, you’ll want to meet with non-profit foreclosure counselors that can help you figure out your specific situation.
Get organized so the counselor has an accurate idea of your financial condition. Gather all the foreclosure letters and note all the correspondence you’ve received from your lender. Mortgage statements, tax returns, bank account statements, pay stubs, and proof of other forms of income (like rental, disability, child support, etc.) are important as well.
Since approaching your lender on your own can be quite intimidating, a good foreclosure counselor can also help you negotiate for a reprieve, mortgage modification, special forbearance, and other possible solutions.
Fighting foreclosure means also taking the time to get answers to fine print questions, as these affect what options you have open to you.
What timeline do you have to work with according to your state’s foreclosure laws?
What steps does your mortgage contract allow your lender to take?
Do you have a “right of redemption” where you can reverse the foreclosure?
How can you sell your home? Are you a candidate for a short sale, or a deed-in-lieu?
Sometimes you have to take a hard look at your situation.
Did you buy in over your head? If that is the case, perhaps a more modest home would be better overall. Especially if your lender won’t budge, it can take a lot of time, effort, and sacrifice to keep a house under foreclosure. Selling your car, working another job, and renting out rooms are just some tactics homeowners have taken.
With foreclosures, time is of the essence. If the effort of fighting foreclosure is too difficult for your situation, consider companies like Elite House Buyer who will buy your house off of you for a good price and enable you to get on with your life.