The Road of Foreclosure:
- If you have not missed a payment but know you’re NOT going to be able to make the NEXT payment.
Contact your mortgage company and let them know.
You must call as soon as you know your going to have trouble with a payment.
Have options: Get a No Obligation/Free Quick House Quote
- Ask for a Repayment Plan
First missed payment is spread across the next two (2) payments.
Provides some breathing room. Works for only short term financial problems.
While it’s nice to know that the following options also exist; we are also realists that understand, during hardships, the above first missed payment options may only be the beginning.
If you just missed a payment, how can you afford the next payment plus all the extra fees and legal costs that banks start to load up on the back of people who simply can’t afford that first missed payment.
— REALITY CHECK POINT —
The next steps start to lay the foundation of a successful or failed negotiation with your lender.
Before you pass this point… If you need assistance/suggestions take 2-5 minutes to provide our team with your story.
- Ask for “Forbearance”
This allows you to delay payments for a short period of time. Another option will be used afterwards to get the account back on track.
NOTE: Your confidence level needs to be HIGH that you will be back on your feet SOON. Don’t let your ego/pride play games here… call it what it is and be honest.
Missing one payment; life happens.
However, if your now moving towards missing more payments and having hardship issue(s), consider talking with our Short Sale team regarding your options. If your going to claim hardship and start submitting your own documents (emails, letters, and/or phone calls) to support such hardship… MAKE SURE you continue with the SAME theme/thread throughout your ENTIRE claim. When dealing with banks, EVERYTHING (email/letters/phone) is digitally recorded for “QUALITY” or “COMPLIANCE” reasons. If things don’t work out, the lender can easily recall EVERYTHING from their digital ARCHIVE and submit a “QUALITY” winning case against YOU in a court of law.
- If you have missed 2-3 payments, plus late and legal fees…
Your leader may still work with you; however, during hardships banks know the deck is stacked against you and the clock is ticking to that next payment.
A popular option we have seen banks offer at this point is:
Require you to pay 1/3 of your diligent payment (including late/legal fees) upfront…
Pay off the remainder over the course of X months.
Never ignore the leader’s letters…
If you can’t “deal” with this right “now”… this is a normal (expected) stage.
However, it’s a great sign that you or someone on your behalf is taking time to research these options.
If your at this point, contact our Short Sale team to negotiate on your/their behalf (free of charge).
- Loan Modification Plan
Leader adjusts the terms of the loan by:
Lengthen the amortization table
Lower the interest to lower the payments
- Short Refinance
Lender agrees to forgive some of the debt and refinance the rest into another loan.
- Allow our Short Sale team to negotiate a Short Sale with your lender.
This option is normally ALWAYS better than Foreclosure.
NOTE: If your at this point, there is very little time to work on this… You only have three options left: Short Sale, Deed in Lieu, and Foreclosure.
- Deed in Lieu of Foreclosure
This option is when the bank gets the rights to the house (deed) and your credit is flushed for several years. This may also hurt you at tax time as the leader will report this as a write off. Therefore, Uncle Sam (tax collector) will consider the banks loss, as your gain “income” to you; even though you didn’t receive any cash/payment. Be prepared to deal with these tax implications. This will also have a negative impact to your credit report… not the biggest, but big enough to still cause future credit issues.
If your at this stage… we have very little time to work with… if your now at the acceptance stage and want to minimize the credit fallout, call our office to see if there is any we can do to Avoid or Stop Foreclosure with the time we have left.
Associated Topic: Bankruptcy
NOTE: Filing Bankruptcy will not stop a Foreclosure.
Bankruptcy may delay Foreclosure a couple of months while your Debt and Legal Fees continue to grow; however, it will NOT stop Foreclosure. Our Short Sale team knows when to and when not to leverage these types of legal tools.
Contact Us for more details.