Foreclosure? My brother was served with foreclosure papers yesterday.. What options does he have?
Question:
Answer:
It's unfortunate that your brother is faced with this dilemma. Unless your brother has someone he can trust to purchase the house from him and then lease it back to him (with an option to purchase), your brother will need to do one of 8 things. Here are his 8 options in a foreclosure:
1. Reinstatement: Come up with the money to make the loan current.
2. Redemption: Pay the loan off in full.
3. Deed in lieu of foreclosure: Surrender the deed to the lender. This will have a less impact on his credit.
4. Legal delay: If you can prove that the amount owed is incorrect, you can delay the foreclosure.
5. File bankruptcy: This will delay the foreclosure, but at the end he will lose the property and ruin his credit.
6. Renegotiate with the lender: call the lender and renegotiate the loan. Maybe they can either refinance him or hold off on accepting payments for a short period of time.
7. Sell the property: Sell the property to either an investor or a buyer.
8. Do nothing: eventually get foreclosed on and evicted. Unfortunately, the majority fall into this category. They have this notion that they will win the lottery or a family friend will loan them the money. This, of course, rarely happens and they end up losing everything.
The above are the only options available. These are also my opinions and should not be considered legal or professional advice. You should consult with a real estate lawyer and/or accountant before taking anyone's advice.
That said, what investors do is they come to you and negotiate a deal. For example, they will probably give your brother anywhere from 0 to 25k for the equity in his house and/or help him move out. The investor will then negotiate with the lenders to reduce the liens and stop the foreclosure. They will then turn around and sell the place as soon as possible for a profit.
If you want, have your brother contact me to discuss his options in detail. Depending on his factors (the state he is in, which lien holder is doing the foreclosing, how far he is in the foreclosure process, how much he owes, etc.) I can either help him out or refer him to someone who can.
Good luck and I wish him well.
the only option he has is to pay his payments up to date
He's going to have to figure out how to get current on his payments in the next month or two, or he's going to lose the house.
He can sell it if he wants to, and that is probably his best option. He can talk to the bank and explain to them that he wishes to sell and ask that they hold off on foreclosing.
If he can't get a traditional buyer quickly, there are companies that will buy houses out of foreclosure or immediately before foreclosure, and he may need to contact one. He won't get as much for it as if he went through a traditional sale, but it will solve his problem. They advertise in the paper and sometimes put up signs in neighborhoods.
Good luck.
The laws vary by state but your brother has options.
At this point he should hire a bankruptcy lawyer just to postpone the foreclosure process. It will cost him less than $1000 to do this and he doesn't have to actually file for bankruptcy.
A decent lawyer should be able to postpone the foreclosure for at least another 6 months probably more. With the extra time he has now he needs to see if he will be able to make all the back payments or put the house up for sale.
But getting the lawyer is a must if not the bank will foreclose and he will loose money, ruin his credit and from what it sounds like he will still owe money to the bank after the foreclose and he will get sued by the bank also.
if he actually goes through with the bankruptcy he should be able to stay with the house for at least a couple of years without making the payments.
speak to a lawyer about a chp13. I do foreclosure bail out but the max ltv would be 70 -75 % .Sound like your brother ltv would closer to 90-95. If he can not go chp13 SELL THE HOUSE
More Related Questions & Answers...