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Bob Schwartz
San Diego
real estate broker
Certified
Residential Specialist
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My house has been foreclosed: what now?
Today, foreclosure is a big issue in regards the real estate market. So,
what exactly does foreclosure mean? Suppose, you have taken a loan from your
bank, and you secured it against your home. You have been making regular
repayments but fail to make a particular repayment on time and this arrear
keeps recurring over a period. In such a situation, the bank or some other
financial institution, from whom you have taken the loan, may forfeit your
home legally. Now, they sale your home to make up for their loss and,
eventually pays off your other debts, if any. This legal procedure of
selling a fixed property is known as foreclosure.
Most lending places are willing to work with their customers and will
provide some basic foreclosure information to them in order to come to an
agreeable solution that does not include repossession proceedings on their
homes. The property owner needs to ask their lenders exactly how they do
their foreclosures if no other solution is available. There may be instances
where a lender is willing to accept a lower payment for a brief period of
time to keep the loan from getting any deeper into default.
If you know that you are not going to be able to save your property from
foreclosure, then you need good information to be aware of the several
different choices you have in order to secure your credit. One of the
easiest things to do is ask for a chance to sell your home before it goes up
for foreclosure. Many lenders are willing to let their customers the
opportunity to put their house on the market and sell it for a price that is
agreeable to all parties.
What are your options, when faced with bank repossession of your home?
Surprisingly there are quite a few. Firstly you can do what is termed as a
pre foreclosure loan. This is when you find an investor to pay off your
present loan and take over the title of your home. This can be a family
member or an agent interested in selling your home for monetary gain. If it
is an agent they will sometimes pay you a little more and you will make a
marginal profit. In this way you will both win. You will save your home from
being repossessed and the agent has made a nice profit. Of course the agent
will come out better monetary wise. The lender is happy because he got back
his money and will not be stuck with a repossessed house to auction.
Other foreclosure information includes using a reverse mortgage. People over
the age of 62, who are looking at a repossession of their property, may have
the option of securing a reversed mortgage to pay off the debt. Basically
what a reversed mortgage does is take the current equity in the home or
property and turn it into usable cash without having to secure another
debilitating loan.
Other useful foreclosure information includes documenting everything. No
matter what else happens, make sure you document every conversation with
your mortgage company that you have. Repossession procedures usually take
three to six months to run their course from start to finish. As long as you
remain in contact with your lender and are either; making an attempt to work
out an agreeable arrangement to bring your mortgage to date, to pay lesser
amounts as agreed. Or attempting to sell your home, you have a legal leg to
stand on if for some reason you need to fight the lender in court.
Another alternative to bank repossession is a stop foreclosure loan. This
can be done if you are not in a very bad financial position, but need a
break with your monthly payments. With this loan you will pay off your first
loan and start a new one. If you have been paying your house payments for a
little while, this could work in your favor. Because the principle will be
smaller it will make the monthly payments less. This will certainly ease
your financial situation and allow you to get back in control.
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