My house is in foreclosure, now what?
By: Gina Dewar
I’m not a financial or legal advisor, but I can offer some general steps, as your real estate agent, to consider if your house is in foreclosure. It’s essential to consult with a professional who can provide guidance specific to your situation.
First of all, what is FORECLOSURE?
The legal process by which a lender acquires possession of the property securing a mortgage loan when the borrower defaults. (Source: THE MORTGAGE ENCYCLOPEDIA)
Here are some general steps you might want to take:
- Contact Your Lender: Reach out to your mortgage lender as soon as possible. Communication is key. Explain your situation and ask if there are any options available to avoid foreclosure.
- Review Your Mortgage Agreement: Carefully review your mortgage agreement to understand the terms and conditions, especially regarding late payments, default, and the foreclosure process.
- Consult with a Housing Counselor: Consider speaking with a HUD-approved housing counselor. They can provide guidance and information on foreclosure prevention programs and resources.
- Explore Loan Modification: If possible, work with your lender on a loan modification. This could involve changing the terms of your mortgage to make it more affordable.
- Consider a Forbearance Plan: Depending on the reason for your financial hardship (e.g., temporary job loss), you may be eligible for a forbearance plan, which allows you to temporarily reduce or suspend mortgage payments.
- Sell Your Home: If you can’t afford to keep your home, selling it might be a better option than foreclosure. You can use the proceeds from the sale to pay off your mortgage. (Your realtor can help you with this).
- Short Sale: If you owe more on your mortgage than your home is worth, you may consider a short sale. This involves selling the property for less than what you owe on the mortgage, with the lender’s approval. (Your realtor can help you with this, too).
- Deed in Lieu of Foreclosure: In some cases, you may be able to voluntarily transfer the property to the lender instead of going through foreclosure. This can be less damaging to your credit.
- Bankruptcy: As a last resort, you can explore bankruptcy as a way to temporarily halt the foreclosure process. It’s a complex legal process and should only be considered after consulting with an attorney.
- Legal Assistance: Consult with a foreclosure attorney. They can provide legal advice, represent you in court if necessary, and help you understand your rights and options.
- Prepare Financial Documents: Be prepared to provide your lender with financial documents to support your request for alternatives to foreclosure, such as tax returns, bank statements, pay stubs, and a hardship letter.
- Stay Informed: Keep track of the foreclosure process in your area. Foreclosure laws vary by state, so understanding the specific timeline and legal requirements in your jurisdiction is important.
Remember that the earlier you address the issue, the more options you may have to avoid foreclosure. It’s crucial to act quickly, communicate with your lender, and seek professional advice to find the best solution for your specific situation.
GINA DEWAR (NEWJOURNEY REAL ESTATE)
DRE#02057793
