INFORMATION IS POWER
FORECLOSURE?
THERE ARE OPTIONS AND WE CAN HELP YOU!
The causes of foreclosures are varied, the loss of a job, medical expenses, variable loan rate resets and other life-altering occurrences can happen to anyone. If we neglect paying our credit cards it hurts our credit rating, but if we stop paying our home loan the situation is even worse, because the lender can foreclose, taking ownership of the home away from us.
The most important thing to do when you cannot make your mortgage payments is to get informed. We hope that the following information will help you understand the foreclosure process and your options within the process.
The worst thing you can do is ignore the situation!!!
Don't Be Embarrassed!
You must put your pride on hold if you're truly serious about stopping the foreclosure process. Lenders do not want to foreclose, and will usually work with you to get you back on track.
Tip #1: Contact your lender as soon as you know your payments will be late.
Tip #2: Never ignore your lender's letters or phone calls. Ignoring the problem won't make it go away.
Tip #3: Never assume your situation is hopeless.
Solutions for Temporary Problems
Reinstatement
Reinstatement might be possible when you are behind in your payments but can promise a lump sum to bring payments current by a specific date. In California, the borrower's statutory reinstatement right expires five business days prior to the date of the Trustee's Sale or any postponement. This is an absolute right which cannot be shortened or terminated by the lender.
Conventional Refinance
At all times before the foreclosure auction actually takes place and the property sold to a third party or reverts back to the lender, you have an absolute right to pay off the loan that is in default.
Equity Loan
Equity Lenders are commonly referred to as "Hard Money" lenders. A hard money loan is not based upon the credit worthiness of the borrower but is usually made based solely on the equity in the property.
Forbearance
In forbearance, you are allowed to delay payments for a short period, with the understanding that another option will be used afterwards to bring the account current. Lenders sometimes will combine Forbearance with Reinstatement if you know you'll have the funds to bring your account current by a specific date.
Repayment Plan
If your account is past due, but you can now make payments, the lender might agree to let you catch up by adding a portion of the past due amount to a certain number of monthly payments until your account is current.
Short Refinance
This option just recently became available in the most recent wave of foreclosures and is becoming more acceptable to lenders. Just as a lender would approve a short sale, they may approve a short refinance.
Solutions for Longer-Term Problems
Mortgage Modification
If you can make your regular payment now, but cannot catch-up the past due amount, the lender might agree to modify your mortgage. One solution is to add the past due amount into your existing loan, financing it over a long term. Modification might also be possible if you no longer have the ability to make payments at the former level. The lender can modify your mortgage to extend the length of your loan (or take other steps to reduce your payments).
Selling Your Home - If you have equity
If catching up is not a possibility, the lender might agree to put foreclosure on hold to give you some time to attempt to sell your home. In this situation you are responsible to pay the transaction fees (Approx. 6% of the sales price) from your remaining equity. As a premium full service discount Real Estate brokerage Empire Realty is prepared to expedite the sale of your home while saving you thousands of dollars in sales commissions.
Selling Your Home - If you have no equity
The lender might agree to allow you to attempt to sell your home as a Short Sale. In this situation you are not responsible to pay the transaction fees, the Lender pays all associated sales costs. As a premium full service discount Real Estate brokerage Empire Realty is experienced in negotiating Short Sales with Lenders and can assist you.
Deed in Lieu of Foreclosure
When the lender allows you to give-back your property--and forgives the debt. It does have a negative impact on your credit record, but not as much as a foreclosure. The lender might require that you attempt to sell the house for a specific time period before agreeing to this option, and it might not be possible if there are other liens against the home.
File Bankruptcy
By filing a bankruptcy you automatically and instantly stop the foreclosure process. This strategy will buy you time to close a transaction or may even allow you to retain your home while repaying the default over a period of up to five years.
Use Your Military Status
If you are a member of the armed services on active duty and extended deployment, you can request a court to temporarily postpone a foreclosure or eviction and even reduce the interest rate on your mortgage payments. These rights are contained in the "Soldiers and Sailors Civil Relief Act of 1941".
Do Nothing
More people take this option than any other, either because they have no desire or motivation to do so or they are unaware of their options. This is where Empire Realty is here to help, we can help you navigate these trying times.
For FHA Loans
The lender might be able to help you receive a one-time payment from the FHA Insurance fund. Your loan must be at least 4 months but no more than 12 months past due and you must show you are able to begin making full mortgage payments.
- You must sign a promissory note which allows HUD to place a lien on your property for the amount received from the fund.
- The note is interest free, but must eventually be repaid.
- The note becomes due when you pay off the loan or when you sell the property.
For VA Loans
VA Regional Loan Centers offer financial counseling that's designed to help you avoid foreclosure. Call 1-800-827-1000 and ask for the phone number of the Loan Service Representative in your area.
Contact a HUD-Approved Counselor
If you don't want to talk with your lender first, contact a HUD-approved counseling agency. A counselor can help you determine which options might be available to you and negotiate with your lender to work out a repayment program. You can find an approved agency on the Web.
Put the Process in Motion
Your lender won't automatically put you into a program to bring your loan up-to-date, you must take action. You must put the plan into motion and provide the lender with the documentation they require to analyze your financial situation.
Although lenders do not want to foreclose if it can be avoided, they do want to make sure you can follow-through on any promises you make to bring your account current.
Be prepared to share all details about your financial situation with your lender.
- An explanation of your current financial circumstances.
- Details about your current income.
- A list of your household expenses.
The lender will review and analyze your situation before offering a solution to bring your loan up-to-date.
Empire Realty is here to help you!
There are no fees, no signing away your home or rights and no scams. Just honest reliable help and information, we are here to confidentially help you navigate these hard times.
If you are in dire financial straits and can no longer make your house payments, don't wait, e-mail or call Empire Realty TODAY!
909-579-6611
Empire Realty will help you negotiate with your lenders to find a solution that is best for you, we cannot guarantee that we can delay or stop the foreclosure process but we can guarantee that we will work with you and your lenders to find the best possible plan of action to help your situation.
The Foreclosure Timeline
Judicial Foreclosure
The Judicial Foreclosure process is rarely used in California . It will only be done if there is no "power of sale" clause in the original loan documents, or if the lender wishes to pursue a deficiency judgment against the borrower. If this process is used, the lender sues the borrower to obtain a decree of foreclosure and order of sale; the court may give the borrower a right to redeem the property for up to one year.
Judicial Foreclosure
The Non-Judicial Foreclosure process is more common in California , and is used when there is a "power of sale" clause in the original loan documents. This clause authorizes the lender to sell the property in case of a default. If the loan documents specify the place, time, and terms of the sale, then those details must be adhered to. If they do not specify the time, place, and terms of the sale, then there are a series of guidelines that must be followed.
Notice of Default
A notice of default is recorded in the county that the property is located in, and a copy of the notice is sent to the borrower within ten (10) days of the notice being recorded. The borrower is given ninety (90) days from the date the notice is recorded to cure the default.
The first thing to do is decide if you want to keep your house. If you don't want it, you could sell it the traditional way, if you put the house on the market soon after receiving the 'Notice of Default'. This enables you to avoid foreclosure and keep the equity. Alternatively, you could sell it to a foreclosure investor. Selling it to an investor won't net you as much cash, but it will stop the foreclosure problem quickly and allow you to get on with your life.
Several options exist if you want to keep your home. The first option is Lender Mediation and involves negotiating a Forbearance Agreement. This option is successful 97% of the time and involves a Professional Forbearance Advisor to represent you to your Lender. The Advisor is able to offer the Lender several options that make sense for both you and the Lender.
Refinancing your home is a solution that's commonly used to stop a foreclosure. There are several specialty home loan products specifically designed to assist a homeowner get out of foreclosure trouble. You'll want to work with a Loan Officer who is experienced with these types of home loans because they're unique compared to traditional home loans.
Another option is ''Sale/Leaseback''. With this option an investor purchases your home (including all your late payments and legal fees) and then leases the house back to you. One to two years later you buy your house back from the investor. Your objective will be to fix the problems that caused you to be late with your mortgage payments, and work on fixing your credit, while you're leasing your home. That way you'll be able to qualify for a reasonable loan when it's time to buy your house back. Many people choose this option to avoid bankruptcy.
The next and second to last option is Bankruptcy. Chapter 13 is generally used to halt a foreclosure and can be done up to the minute before the Trustee sale. Chapter 13 enables you to formulate a reasonable personal budget and structure your debt so you're able to continue paying your financial obligations while keeping your home. I can refinance your house after you're in the chapter 13, enabling you to pay off the bankruptcy plan and conclude the chapter 13 early.
Actually, there is one more option, if you don't like the idea of bankruptcy. It's called a 'short-sale' and consists of an Investor buying your house from the bank, paying all your arrearages and keeping a 'foreclosure' off your credit report.
The last option is the least desirable and that is to do nothing. Doing nothing guarantees your home will be taken away and your credit tarnished for 10 years. It would be better for you to offer a ''Deed In Lieu of Foreclosure'' to the Lender than it would be to be foreclosed upon because your credit wouldn't be damaged quite as bad.
Notice of Sale
After the ninety days, if the borrower is unable to cure the default, a notice of sale is recorded. The notice states that the lender or trustee will auction the property within twenty-one (21) days of the notice. Copies of the notice are sent to the borrower by certified mail, as well as posted in a county newspaper for three consecutive weeks before the sale. The notice is also posted directly on the property, as well as in a public forum, such as the county courthouse.
Trustee Sale
The sale is conducted by the lender's representative at the scheduled time and date. The high bidder must immediately pay the full winning bid amount by cash or certified check and receives a trustee's deed once the sale is completed. The lender will usually bid on the property for the amount of the due loan balance plus costs. Ownership of the property reverts to the lender if there are no other bids.
The lender cannot sue the borrower for a deficiency judgment, and the borrower has no right of redemption after the sale of the property.
Repairing Your Credit
If your home loan is past due, your other obligations probably are too. A nonprofit credit counseling agency might be able to help you work with your creditors to reduce your monthly payments by lowering interest rates or extending repayment periods.
The key word here is nonprofit. Steer clear of companies that promise you quick, easy results for all of your credit problems--if you pay them a large fee. You know better--that's not how it works in the real world. The National Foundation for Credit Counseling is a good place to start.
Whatever your situation or choice in the different options you have available to you Empire Realty is here to help you. We have confidentially helped hundreds of people and can help you!
Empire Realty is here to help you!
There are no fees, no signing away your home or rights and no scams. Just honest reliable help and information, we are here to confidentially help you navigate these hard times.
If you are in dire financial straits and can no longer make your house payments, don't wait, e-mail or call Empire Realty TODAY!
909-579-6611
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