In this time of crisis, where many people are losing their homes there are many terms that people need to understand.  They also need to understand all their options, before just turning their home over to the bank.

Preforeclosure:  This occurs when you get the first letter from the bank stating that you missed a payment.  When dealing with a traditional 30 year loan, then you have 90 days before you receive this letter.  If you have a subprime loan, then you will receive this letter after 37 days.

Notice of Default: This is the letter from the bank stating that you have missed payments and that you are in default of the terms of your loan. From this letter, you have 90 days to restructure payments or sell the house, before an auction date is set.

Notice of Auction Date:  This is the letter from the bank stating that your home will be auctioned off in 31 days. It is at this point where people try to start selling their homes, or asking about short sales.

The Auction:  Will generally occur at the County Clerk's office steps.  However it may vary depending upon which state or area that you live in. It could actually be on the courthouse steps.

Options:  If you are in the unfortunate circumstance of being in any of the above situations, then you need to consult your options.  There are a few options out there.

1.  As soon as you realize that you are going to fall behind in your mortgage payment, or that you cannot afford the home, then put your home up for sale immediately.  By doing this you can negotiate a short sale with your bank and/or you can submit a deed-in-lieu of foreclosure.

2. Short sale:  This is the option where the bank agrees to take a lesser amount for the property.  The difference between the two amounts is generally forgiven by the bank.

3. Deed-in-Lieu of Foreclosure:  This can only be done if your home has been for sale for at least 90 days with an agent. Putting your home up yourself, will not help you for this option. You will sign over your interest to the bank, and will generally show up better than a foreclosure on your credit report.

4. Restructure Payments:  The bank will generally want to work with you to change your payments, so that they do not have to go through the foreclosure process. Talk to the bank and don't ignore them.  It costs them too much more money to go through a foreclosure than it is to renegotiate the terms of the loan.

This can help some people save their homes and at least will help them understand the things to expect throughout this process. 

Matthew Zgonc

209-614-3103

www.buysellmodesto.com