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1. What is bank foreclosure?
2. How long does the foreclosure process take?
3. What are my options, how do I exercise them?
4. What about these people claiming they can save my
home?
5. So, how can I keep my home?
6. Is it possible to sell my home rather than lose it
to foreclosure?
7. I don't want to keep the house nor bother with
trying to sell it. What would happen if I just walked away?
8. What does "Short Payoff" mean?
9. What happens if they sell my house for less than I
owe?
10. What if they sell my house for more than I owe,
do I get any money?
11. How does a Sheriff's Sale work?
12. If I'm evicted, how many days notice do I get?
13. Is it really possible to save my home from
foreclosure?
14. I've missed a few mortgage payments, what happens
now?
15. Do I have any options after receiving a
foreclosure notice?
16. What about foreclosure scams?
17. WARNING!!
Up 1. What is
foreclosure?
The legal process that banks and mortgage companies
use to force the sale of your home to repay a debt; usually
the mortgage on your home. Even if one payment is missed ,
your are considered in default. A foreclosure notice is
typically filed after three or four payments are missed and
attempts to collect the debt have failed.
Up 2. What is the
foreclosure process and how long does it take?
Each state governs the foreclosure process
differently. As a minimum, the law requires that the
borrower receive sufficient warning or notice before the
foreclosure can take place. Other rights and
responsibilities may be outlined in the mortgage or loan
documents you signed when you purchased the home.
Up 3. Do I have any
options and if so, how much time do I have to exercise my options?
You may have several options available to
you as long as you own your home and act early. Once your
house is sold, whether by you or through foreclosure, many
of your options disappear.
Knowing what your options are, puts you in a much
stronger position to deal effectively with the foreclosure
process.
Up 4. I get letters
and notices from people claiming they can help me save my home - are
they for real?
When foreclosure documents are filed they
become a matter of public record and many people review
these records for various purposes such as compiling lists
to sell to bankruptcy attorneys, investors, real estate
professionals and other people interested in either
purchasing your home or . . . helping you save it.
Some of these offers are probably legitimate and a
few of them have your best interest at heart.
Up 5. So, how can I
keep my home?
The best place to start is to assess your
situation and discuss your options with your bank or
mortgage company.
If your lender is unwilling to work with you, then
consult with a foreclosure hotline in your area or a local
attorney".
Up 6. I would rather
sell my home than lose it to foreclosure . . . is this possible?
Yes! It's called the Compromise Sale or the "Short
Sale" and a foreclosure notice does not prohibit you from
selling your home as long as you own it. However, you must
act quickly. Call or email us today, and we will work
quickly with you, your realtor and your mortgage company to
accomplish the Pre-Foreclosure sale process.
Up 7. I don't want to
keep the house nor bother with trying to sell it. What would happen
if I just walked away?
There is a legal process for walking away from your
home or forfeiting your property. You should seek the advice
of an attorney well versed in this area because you could
face serious consequences if you just walk away.
Up 8. What does
"Short Payoff" mean?
Your lender agrees to accept less than the
total owed in exchange for releasing the mortgage as a lien
on the property. (it's also called pre-foreclosure sale,
short sale, pre-sale and compromise sale).
WARNING! There may be tax consequences. CONSULT WITH
A CPA IN YOUR AREA.
Up 9. Can they sell
my house for less than what I owe?
Yes! Banks are not in the business of
owning or selling homes and they do not like to foreclose on
property because it's expensive and they usually lose money.
They must prepare the home for sale, hire a real estate
agent to sell it, and until it's sold, it remains a
non-producing asset on their books. Often the lending
institution would rather take a loss on the home than have
it remain on their books as a non-producing asset.
However, if they sell it for less, the balance is
called a deficiency and your bank can use whatever means
they deem necessary to collect the outstanding balance. Most
states treat this as an unsecured debt (just like credit
card debt) and give the bank (or creditor) the same legal
rights to pursue you, usually by suing you in court. We work
with your lender/bank requesting to waive the deficiency
judgment against you.
Up 10. They sold my
house for more than I owe, do I get any money?
Yes! Any amount over the total debt owed will be paid
to you upon the transfer of ownership (closing).
Up 11. How does a
Sheriff's Sale work?
If you fail to pay your property taxes, the city to
whom the taxes are due can foreclose through a Sheriffs
Sale. Some cities will use this option after one year of non
paid taxes while other cities may wait 3 years or more.
Additionally, any creditor or lien holder can use this
option once you default on a loan. However, any overdue
taxes are paid first, then first, second, etc. mortgages are
paid before any other leins or judgments can be paid. Please
check with the Public Trustee's office in your county for
details.
Up 12. If I'm
evicted, how many days notice do I get?
Typically you'll get 3 days notice! Most banks will
start the eviction process immediately after the foreclosure
process but the FHA, HUD and VA are usually much slower. If
you own rental property, your tenants will normally be given
30 days notice. If you need more time than given, contact
your lending institution immediately to ask for an
extension.
Up 13. Do I really
stand a chance of saving my home from foreclosure?
Yes! Knowing and understanding what options are
available to you is the first step. Your success
depends on implementing the proper option in a timely
manner.
Up 14. I've missed
a few mortgage payments, now what happens?
Foreclosure may occur. This is the legal
means that your lender can use to repossess (take over) your
home.
When the actual foreclosure happens you must move or
you'll be evicted. Also, you may still owe the lender if
they sell the house for less than you owe. Because
foreclosure or a deficiency judgment could seriously affect
your ability to qualify for credit in the future, you should
avoid foreclosure it if all possible!
Up 15. What options
do I have once I've received a foreclosure notice?
The most popular options are:
Special Forbearance
Your lender may be able to arrange a repayment plan based on
your financial situation. Your lender may even provide for a
temporary reduction or suspension of your payments. You may
qualify for this if:
- You have recently lost your job or source of
income or;
- You or a spouse have suffered a hardship,
- You had an unexpected increase in living
expenses.
You must furnish us information to show that you
would be able to meet the requirements of the new payment
plan.
Mortgage Modification
We may be able to refinance the debt and/or extend the term
of your mortgage loan. This may help you catch up by
reducing the monthly payments to a more affordable level.
You may qualify if you have recovered from a financial
problem but your net income is less than it was before the
default (failure to pay).
Pre-foreclosure Sale
This will allow you to sell your property and pay off your
mortgage loan to avoid foreclosure and seriously damage to
your credit rating.
Deed-in-lieu of foreclosure
As a last resort, you may be able to voluntarily "give back"
your property to the lender.
You may qualify if:
- you are in default and don't qualify for any of
the other options;
- your attempts at selling the house before
foreclosure were unsuccessful; and
- you don't have another FHA mortgage in default.
Check with your lender for the requirements they have
for this option to be available.
Bankruptcy
Consider this option carefully. This causes damage to your
credit rating! We can work with you to avoid bankruptcy and
foreclosure, saving your credit!!
Up 16. What about
foreclosure scams?
You can usually spot a scam because it
sounds too simple or too good to be true.
If you're selling your home without professional
guidance, beware of buyers who try to rush you through the
process. Unfortunately, there are people who may try to take
advantage of your financial difficulty.
Be especially alert for the following:
Equity skimming - In this type of scam, a
"buyer" approaches you, offering to get you out of financial
trouble by promising to pay off your mortgage or give you a
sum of money when the property is sold. The "buyer" may
suggest that you move out quickly and deed the property to
him or her. The "buyer" then collects rent for a time, does
not make any mortgage payments, and allows the lender to
foreclose. Remember that signing over your deed to someone
else does not necessarily relieve you of your obligation on
your loan.
Phony counseling agencies - Some groups
calling themselves "counseling agencies" may approach you
and offer to perform certain services for a fee. They will
not offer you all your options, but only the one(s) they
will most benefit from. You can usually spot them when they
rush you to sign an agreement and/or asks for your deed.
WARNING:
Legal Information
Legal information is NOT the same as legal advice. For legal
advice and foreclosure procedure, consult with an attorney in
your area.
CAUTION: The use of any information contained herein, such as
opinions, instructions, suggestions, advice, and other similar
content is at the user's own risk. You are strongly encouraged
to consult with one of our foreclosure specialists regarding the
specifics of your situation, or call your realtor. Your
consultation is without cost and confidential.
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