Nobody buys a home expecting to have it taken away from them by the powers that be. However, owning a home can be a struggle. Life happens, unexpected things occur. If the bills are piling up and the money to pay them just isn’t coming, the mortgage lender will come knocking.
Foreclosure is heartbreaking. It’s the road nobody wants to go down. Trying to run the other way will not make your problems go away.
In fact, that’s the last thing you should do.
As a California homeowner facing foreclosure, you have options, even if your home is already in foreclosure. The first step is to decide what’s best for you in your circumstances. They say knowing is half the battle. In this case: taking action wins the war.
Timeline
Foreclosure begins with a notice of default from your mortgage lender. For most loans, it happens when you are 90 days late on your payments due. In the state of California, the lender may start the process 30 days after sending you an initial letter stating their intent to do so.
The clock is ticking and time is not on your side. Before you decide what to do, you need to talk to the people that can help. At this point, many people get scared of their lender. The reality is, your lender wants to work with you. It is not their priority to repossess your home. They just want what you owe them. It is in their best interest (and yours) to come up with solutions, whether to refinance or sell to avoid the costs of foreclosure.
Be willing to discuss your situation. Negotiate. Ask questions. Ask about the feasibility of restructuring monthly payments. The lender may be able to include your missed payments into a payment plan made over time. Negotiate for a reduced interest rate. Based on their experience dealing with these cases, they may have creative suggestions based on your circumstances.
Foreclosures can happen in as few as 200 days from the date of delinquency. More often, they take many months to a year. It is important to know that at any point along the foreclosure timeline, the home is yours until it gets sold at auction or taken back by the bank. Until then, it is never too late to stop the process. The sooner you decide how to do it, the more power you have to stop it.
Equity
If your property is worth more than what you owe, on it, you can try to rescue the house and continue owning it. Maybe you are confident about overcoming any financial problems that landed you in the situation; you might consider entering into a foreclosure avoidance plan or getting a loan modification. Just make sure to read the fine print. Signing off on what appears to be a fair deal may wind up haunting you in the long run if, for any reason, you are challenged to keep up with more payments.
Emotions get in the way. So does pride. Some homeowners just don’t want to let go of the home they love. Others assume their prospects will improve and they vow to do better in the future. Using whatever equity there is in your home to satisfy your debts is costly in the short term and may not be economical in the long run.
Short sale
A short sale is not as daunting to your credit as a foreclosure, but it is still a loss on your investment. Short sales require working with a real estate agent to sell your home. Notify your mortgage lender immediately if this is your plan. You will need their approval to sell the house for less than what you owe on it.
Sell for cash
Consider selling your home to a cash buyer, especially if the hourglass is running out. A professional cash buyer can make a quick offer during the foreclosure process. Once you agree to the sale, it can be finalized in a matter of weeks, if not days. An intriguing option if you are aiming for a quick solution; you can avoid the complications typical to traditional home sales (home inspection, repairs, listing, and marketing). A direct sale also means skirting the fees and commissions that come with working with an agent.
Deed-in-lieu
Transferring ownership to cancel the loan should be last on your list of options for avoiding foreclosure. The good news is, this option spares you time, money and hassle otherwise spent trying to save or sell your home. The bottom line is: you walk away with absolutely nothing.
Moving forward
No matter how you work to avoid foreclosure, make moves to better your financial position. If you choose to sell your home, why not sell everything inside of it? Can you liquidate assets? Do you need that second car?
Saving instead of spending is good advice for just about anyone. What little things can you do to put away more for the future? Get a second job? Plan and stick to a strict budget?
Although foreclosure is the end-of-the-line for many homeowners; it is not the end of the world. Knowing your options and taking action on them to avoid foreclosure is your best defense against its unfortunate consequences. Plenty others have gone through it and moved on with their lives. And so will you!
Are you facing foreclosure in California? We buy California homes from homeowners like you in need of a quick cash solution. Don’t waste time in a frustrating situation! Contact Home Helpers Group to start the process right away!
About the Author: dean@homehelpersgroup.com
