Help - my best friend's house is in a foreclosure - How can realtor and lenders help?
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Answer:
They can try what is called a short sale. Is what this means is they agree to sell the house short of foreclousure. It has to be fast and normally the bank will discount what is owed on the property. Say they owe 150,000 the bank might allow a short sell to a buyer for 120,000. That is the best option. Any real estate agent will help them and there are many borrowers out there that just look for short sales.
Second option is to buy time. The day before the sale they would file for a chapter 13 bankruptcy. That will stop the sale. The bankruptcy court will ask them to show up at a creditors meeting. If they dont show up the bankruptcy will be dismissed. Then the lender will have to go through foreclosure again. They do the same thing. After 2 or 3 times the bankruptcy court wont allow them to keep doing it. Might keep them in their house for another 9 months while they work out a short sale or trying to sell it. But if you do that to a mortgage company they will be pissed and probably wont allow a short sale. They need to call a real estate agent immediately and have the agent contact the bank about a short sale.
It will destroy their credit but thats the best I can tell you.
It's a bad situation. They may want to talk to some of the refi companies. Depending on where they are from they can get government assistance, i.e. section 8 assistance, tanf, etc... It's made for everybody, especially those that fall on hard times. The TANF can be counted as income, so they could work with that with the finance companies. The section 8 assistance programs will also make mortgage payments (not just rent) if the companies are willing to accept payments from the local housing authority (sometimes they are slow with the first couple of payments, and the company has to fill out a bunch of paper work and agree to section 8 terms).
Also, I know it seems pointless but get one of those jobs most people are too proud to take. I worked for Walgreens as a cashier and other similar positions for two years AFTER getting a bachelor's degree in engineering. When it comes to your lively hood you can't be too proud.
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