Foreclosures are indeed hard to accept but you have to face it and waste no time. There’s a long mistaken notion that losing your home to foreclosure is the last act in a sad drama and that the owners have hit bottom so they have nowhere to go.
But, thousands of pre-foreclosure homeowners are now finding out the ways on how they can survive in such ordeal instead of turning over the keys. What some of them realized too late is that there is still hope.
Here are the top three proven solutions on how homeowners can survive in pending foreclosures
- Know your options
It is primarily important to know the foreclosure process so that better options can be chosen before a vast action is made. Take advantage of the 120-day foreclosure waiting period. This can be the most important thing that may be used to stop the pending foreclosure. Maximize the 120-day waiting period by seeking help from anybody who is willing to give a helping hand. Others use this period to avoid unnecessary costs by filing for Chapter 7 bankruptcy if they have already decided that they will not stay in their home anymore. However, if you are more than 60 days late on your mortgage, you will most likely get the dreaded letter from the loan servicer. What you can do is this. Open that letter and quickly take action. Chances are, that letter may include a phone number to call for help or a list of housing counselors. Either way, it is always best to evaluate your options and make the best choice. You can always consult the experts and those that have avoided foreclosures.
Accordingly, you can also refinance the entire loan. If you qualify, you can arrange a reverse mortgage. A reverse mortgage is an option wherein you can tap into the equity of your home without having to sell the house. It can prevent foreclosure and save your equity for your own needs. You can get money from a lender and most likely, you don’t need to pay it back as long as you will live in the house but loan must be repaid if you decide to sell your house, move out permanently, or worst, death occurs. However, to qualify for a reverse mortgage (Home Equity Conversion Mortgage or HECM), you must have considerable substantial equity and your age must be above 62.
- Negotiate or just fight the foreclosure
Some people have been successful in negotiating for foreclosures. How is this done? What you can do is check whether the interest rate is fixed for 15 to 30 years or set to change after a short period. Some loans have definite rates for a limited period and then they adjust to higher payments. Do not fall deeper into the pit by assuming that some ads or offers for foreclosure relief are legitimate especially those that provide quick loan. Do your homework of conducting research about the company that offers such solution. There are actually some companies that take your money and then just disappear. At first, they may seem friendly and understanding by offering too good to be true promises. You have to be suspicious. The next best thing to do is call for a legitimate help. You can contact the Department of Housing and Urban Development.
Consequently, if negotiation does not work out, what you can do is fight the foreclosure in court. To do this, you have to show that the foreclosing party violated the terms of your mortgage agreement and your state’s procedural rules for foreclosures. By doing this, you might be able to temporarily overturn the foreclosure but you have to have a lawyer who can help. Thing is, some courts require foreclosing parties to present documentary evidence of ownership and authority for bringing the foreclosure action prior to letting the foreclosure proceed. But because of the complex way mortgages were sold and resold during the entire real estate bubble, the evidence to this can be missing but it would surely help if you have an access to it.
In many cases, some foreclosure defense attorneys have discovered and revealed instances of lenders violating laws governing the notarization, assignment of mortgages and recording. In fact, some major mortgage lenders stop foreclosure activities temporarily pending internal investigations of their foreclosure practices.
- Sell your home fast
This is by far the best move. Rather than risk losing the payments you’ve made, you can just sell your home fast to cash buyers so that you get to keep the amount you shell out for the house and not ruin your credit rate. There are many buyers who are willing to buy homes “as is” and they will pay cash once you sign the offer acceptance sheet. Selling your home fast for cash is the best way to avoid having a foreclosure hit your credit score really bad and put your family at risk. If you really can’t sell the home quickly enough, or you don’t have the resources to come up with money if you are behind on mortgage payments, this is definitely the best move for you to consider. This may not sound like the ideal situation, but definitely it can get you out of a difficult situation. By selling your home fast for cash, you can avoid the realtor commission check that you have to pay out. This would also require lesser work and effort to get the property sold. What’s best is that you don’t have to sit waiting for an offer. Just ask around or quickly go to classifieds, Craigslist and online portals. You can easily find these lifesaver cash-buyers.
On the other hand, you can negotiate with your loan provider or lender to quickly sell your home without a foreclosure but this would be less than the amount you owe on your mortgage. Although this possibility is not applicable in some states, a short sale can be a worthy idea but you have to get your lender to formally agree in writing that he will let you off the hook for the deficit.
Foreclosures are no doubt, a huge pain but instead of crying over spilled milk and not reaching out for help, you must learn to accept this bitter reality and cope by finding the best solution for survival.