Avoid Foreclosure

Are you facing a foreclosure? It may not be too late to find a better solution.

Instead of letting the bank foreclose on your home, consider selling it.

The foreclosure process starts with a Notice of Default. After 90 days, if you fail to get caught up with payments or arrange a payment plan, the lender can issue a Notice of Sale.

Most foreclosures are nonjudicial. This allows the bank to take possession of your home and sell it. If the sale price is less than what you owe, you may need to pay the deficiency.

A foreclosure is a scary experience. However, what comes after should be equally frightening. Foreclosures stay on your credit report for up to 7 years. During that period, you may struggle to obtain a new mortgage or get approved for a car loan.

In most states, lenders can sell a foreclosed home 21 days after issuing a Notice of Sale. This is not enough time to sell a home through the traditional process of working with a real estate agent.

The faster solution is to sell your home now for cash. You can avoid foreclosure, save your credit, get something for your home, and move on.

Save Your Credit

Don’t let a foreclosure or late house payments destroy your credit. Sell your home now to save your credit score.

Falling behind on payments hurts your credit score and increases the risk of foreclosure. Each missed payment is reported to the credit reporting bureaus. These negative entries appear on your credit report for up to 7 years.

Missed payments lower credit scores more than any other type of negative entry. Most lenders initiate the foreclosure process after a homeowner misses four monthly payments. By the time a lender starts the foreclosure paperwork, your score may have dropped dramatically.

Bad credit limits your ability to obtain new loans. If you suddenly need to buy a new car or cover a major expense, you may find it hard to get approved for a loan. Foreclosure lowers your creditworthiness even further. Future lenders can see the missed payments and foreclosure entries when reviewing your credit report.

Luckily, there are ways to save your credit score.

The fastest, most reliable option is to sell your home for cash. You can quickly get an offer, sell your home, and end your mortgage. You can avoid adding any more negative entries to your credit report.

Avoid Liability for a Deficiency

If you sell your home for less than you owe, you may be required to pay the remaining balance. Luckily, there are potential solutions for avoiding liability for a deficiency after a short sale.
A short sale is when you sell your home for less than the amount due on the mortgage. To recoup their losses, lenders typically try to receive a deficiency judgment.

In most states, lenders are prohibited from collecting the deficiency after a foreclosure. However, these laws rarely stop the lender from requesting a deficiency judgment after a short sale.

A deficiency judgment occurs when a lender attempts to collect the remaining debt owed on a mortgage. The lender files a lawsuit and receives a judgment from the courts.

Fortunately, you may be able to avoid liability for a deficiency. Some lenders are willing to forgive the deficiency if you contact them before selling your home.

If the lender does not waive the right to seek a deficiency judgment, try to make a settlement offer. Many lenders agree to settle for a lower amount instead of dealing with the hassle of collecting the full sum. As a final suggestion, you may file for Chapter 7 bankruptcy.
No matter which option you choose, the next step is to get a cash offer for your home.

Get Something for Your Equity

Building equity is one of the benefits of homeownership. Don’t let it go to waste. Selling your home now may help you get something for your equity.

Unfortunately, finding a buyer is not always easy. Home sales also sometimes fall through. For example, a buyer may fail to get approval for a traditional mortgage. Time can also be a concern, especially when facing foreclosure.

Owner financing may help you avoid some of these issues while earning a better return. With owner financing, you draw up a mortgage note specifying the repayment terms. As the bank is not involved, the deal closes quickly, allowing you to get cash faster.

You can even choose owner financing if you have an existing mortgage. If you are getting behind on mortgage payments, selling your home fast through seller financing could save you from foreclosure.

When you have an existing mortgage, the buyer accepts a “wrap-around mortgage”. The seller then receives a promissory note and pays the lender of the underlying mortgage each month until the first mortgage is paid off.

The sooner you act the sooner you can get cash for your home. You can avoid the hassle of a traditional home sale and get more for your equity.