Foreclosure question?
Question:
Her mortgage is 2400.00 per month (this payment amount includes property ins. and a couple other things.). This high payment is due to the crappy rate she received due to her credit being tarnished. So, this leaves her 14,000 in payments, late fees, etc. Please let me know if there is anything to be done at all and if someone could please explain the foreclosure process. thank you
Foreclosure means the house will be sold at auction to the highest bidder and she will be evicted. If it was such a crappy rate why did she agree? A bankruptcy will delay a foreclosure but not stop it.
She should call 888-995-Hope. They will provide counseling services that may help her save her home. This service is an approved service by HUD.
She needs to sell her house if she can't afford it. Sell it for what she bought it for to an investor, and take te loss. At least she won't have a forclosure on her credit. You should post the house information (location and cost) on yahoo and see if anyone makes an offer!
I can help you and your girlfriend, please email me.
This sounds like a money making opportunity for all the hungry investors out there... Be careful!
The question to ask your friend is, can she afford it?
If not, then the answer is obvious, right?
Try this first. Contact the loss mitigation department and request a loan modification, and hopefully they will say yes in offering this option to your friend. It doesn't hurt to ask...
Good luck!
John Lopez
realestatemichigan@yahoo.com
313-258-1001
www.MichiganInvestorNetwork.co...
www.CurbSideInfo.com
.
No, not unless the bank agrees to it.
She had to have ignored MONTHS worth of notices, letters, phone calls, etc. Foreclosure is a very expensive process, and banks will do almost anything to work with a customer before they will foreclose, because they usually end up losing money on the deal anyway.
Banks will usually file an intent to foreclose after about 90 days of no payments, and it takes about 6 to 7 months to complete the entire process...which is about right based on your figures.
As for her loan, she knew the payments when she purchased the house and the terms of the loan, sometimes it's a tough lesson to learn.
The Foreclosure process, has already started. If she does not respond, the bank will be given permission to foreclose the day of the court hearing, and she will need to be out very quickly. The bank then has the option of auctioning the property or handing it over to a Realtor to sell. However, the bank will not permit her to stay in the home through this process.
I would wager she will need to be out 30 days after the court date.
If she is not out, then a Sheriff will be called to physically remove her from the property. Please tell your friend, NOT to leave the house trashed, because the bank also has the right to charge for ANY expenses that the sale of the home doesn't cover...that is called a deficiency judgement and will be a "double hit" on her credit, and could possibly bankrupt her.
Tell her not to ignore the notices any longer and to call the bank IMMEDIATELY!
First of all..
1. She can reinstate the loan any time prior to the sale by paying the amount due to date.
2. She can sell the home at any time prior to the foreclosure sale.
3. Filing for Bk can delay the foreclosure process, It could possibly stop it depending on which chapter you file (its been
so long, I am not positive on this part)
Since you already know whats happened so far, here is whats to come...
1. She will be notified she is behind, the bank will try to work with her if they can. They do not want the house.
2. The bank will proceed with the process and a notice of default will be filed in public record.
3. The notice of sale will be filed in public record. This will advise the exact date the house will be sold at the courthouse.
4. The house will be sold at auction, if no one buys, it will revert bank to the bank as an REO. (If the bank does not recoup their loss with the sale of the house, she could be liable for the balance and will be sued later.)
5. The new owner will contact her and advise she needs to move. If she does not comply, the eviction process will start.
6. A 30/60 notice will be posted
7. sheriff will come lock her out.
Depending on the state, there could be a right of redemption period.
Greeneyedblond and realestatemichigan had very good advice. YES she can stop it with a bankrupty, its fast and is about $1800. Still a band aid. Next thing is a forbearance. If she is unable to make payments, and does not qualify for a deferment, she could request forbearance from the mortgage company. Forbearance allows payments to stop temporarily or decrease in amount for a specific length of time. The mortgage company may grant forbearance of principal, interest or both. She still would be responsible for repayment of any accrued interest charges. She can make interest-only payments, or the interest will be capitalized (added on to the principal). So they can take what she owes and add it to the principle and start over and even lower her monthy payment. They will base this on her income. They will ask for your last two paychecks, last two mortgage statements and the last 6 months of bank statements. This is to determine what you can afford but this may hurt you if you make alot of money and just mismanage. Forbearance also is like a foreclosure or bankruptcy. Its negative on your credit report. Worse thing they could say no. You can also have someone do a foreclosure buyback. This is what realestatemichigan was talking about. An investor will come and pay your arrears. Unfortunately he will have you sign an agreement to charge a fee which is usually based upon how much equity you have in your home. Would be all your bills, all your arrears and his fee (sometimes $10K, 20K, and $30K) and if that comes to say $70K you have to have that in equity and add say $15K for closing. So you have to have $85K in equity. HE will buy your home for 12 months and take his fee but pay off all your arrears and bills. BUT he will state in the agreement if you miss 2 payments or three payments or even late he can keep your property. Make sure if you decide this you add to take out 3-6 months of mortgage in escrow in case you need it for yourself. (only works if you have that amount in equity) and when the year is up he sells it back to you. Gives you time to clean your credit up (your bills are paid) BUT you had to give away some of your equity. Tough call but works for some people. I used to do it but its been difficult. Some people can just take the money and run cause they dont own the house anymore. So you do have some options. You can also sell it and remain as a tenant. If your prepared to move find an all cash firm that will just buy you out immediately. Sell it to a relative. In any event, good luck. Call that loss mitigation department and see if they will lower your rate, payment, and change the loan to something more favorable. Your home can also appraise for more then you bought it and you can refi and pay off all of your bills and arrears. You would need a tenant. Either way if you get out of this situation and remain there you might want to look into a tenant.. I just dont know how long you have owned your home and I just dont have enough facts to give you more advice.
The foreclosure process itself would be governed by state law, so look up your state's foreclosure laws to find out exactly how it would proceed. In the meantime, here's a list of different ways that you can try to stop foreclosure on the house. There are really no magical ways to end the foreclosure process -- but there are enough tools that homeowners have available, that they can choose from a number of options to help them out of their hardship situations.
1. Save up and get current on the mortgage by paying back the payments you've missed, plus the interest, late fees, attorney fees, etc. Understand that there are often thousands of dollars of extra charges that are added once you start missing payments and especially if the lender hires a law firm to pursue the foreclosure.
2. Work with the lender to put together a repayment plan, which would require you to put down part of the amount you are behind now and pay back the rest over a period of months, along with you current monthly payment. Usually, repayment plans can be worked out through your lender's loss mitigation department, and will result in you paying almost twice as much per month as your regular mortgage payment. This is to help you get caught up on the payments you missed while you are paying your original monthly obligation.
3. Work with the lender to modify the terms of the loan to say that the missed payments are spread out over the life of the loan or put on the back end of the loan. This is called a mortgage modification or loan modification. Some lenders will not do this because they do not hold the paper to be able to modify it. This is especially true for mortgage servicing companies, who only service their loans and collect payments, but who do not own the loans.
4. Refinance -- find a hard money lender or traditional lender that will consider foreclosure refinance loans. Qualifications include lots of equity and lots of income, since your interest rate will probably be over 10%. Foreclosure refinance loans can be difficult to qualify for and may result in higher monthly payments, but they are a good way for homeowners to get a fresh start with a new note and new lender.
5. If you have an FHA loan, you can get a one-time loan from the FHA that will bring you current and is placed as a lien on the property that you would have to pay back if you sell or refinance the home. This is called a partial claim. You would have to contact the FHA directly for this one time payout to get you caught back up on your mortgage.
6. Sell to a private investor or friend/family member and lease/rent the property back from them. That clears off the foreclosure loan on the property and uses someone else's good credit to get a new loan and allows you to stay in the property. Investors can also work out short sales on properties, allow they usually do this in the hope of flipping the property by reselling it quickly at a profit.
7. Bankruptcy will stop the foreclosure process, but is usually an expensive alternative to setting up a repayment plan, mentioned above. Attorney fees, trustee fees, court costs, and high monthly payments cause a lot of people to fail their bankruptcies. Only consider bankruptcy if you desperately want to prevent foreclosure and if you have a significant amount of income you can dedicate towards the bankruptcy payments.
8. Short sales are a good option if you owe more on the property than it is currently worth. A short sale means the bank accepts less than what they are actually owed, and would allow you to get out of the loan, at least. The bank would not be able to come after you for the rest of the loan amount, since, by accepting a lower amount, they forgive the rest of the debt owed on the mortgage.
9. Sell outright if the property is worth enough and you have a willing and able buyer. List the house yourself of through a local real estate broker. In some cases, it is the right decision just to unload the house to stop foreclosure and focus on repairing your credit until you can purchase a new, more affordable home in a few years.
10. If 1-9 do not work, you can offer the bank a deed in lieu of foreclosure, which means you're voluntarily giving the property back to the bank and they are agreeing that the property is payment in full of the loan. This is not much better than a foreclosure, and you have to leave the property anyway, but it will prevent the sheriff sale and eviction process. The bank will not be able to ask for any extra money or sue you for a deficiency judgment, because they accept the property itself as satisfaction of the loan.
11. If 1-10 do not work, you can just move out and walk away and forget about the property. This is definitely not recommended if you care about your credit and plan to borrow money for several years, but foreclosure should teach you not to rely on banks to help you out when you face a hardship. All they really do is promise great deals when you think of going with them, and then throw you to the foreclosure dogs if you miss a payment. Many homeowners simply walk away because the foreclosure situation is so intimidating, but, as listed above, there are numerous options that are better than just giving up on the property.
Those are the most common options that can be used to stop foreclosure. There are a few others (suing your bank, etc.), but they involve much more cost and legal involvement and may not end up stopping the foreclosure process in the end.
Good luck.
ForeclosureFish
http://www.foreclosurefish.com/...
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