Am I doing the right thing to avoid foreclosure?
Question:
I have a condo and an Interest Only loan. The intrest rate went way up and I can't afford it. I've saved up and have made the payment this month but won't be able to do that again. I've tried to get a refinance but with 0 equity and a credit score just under 620, it's very difficult. My refinance guy told me the credit score may go up in a month but I have no guarantee of that. So, I've decided to sell the place. I simply want out of this whole situation. I'll rent for a while. I spoke to a realtor and my place is up for sale right now. My fear is that the market isn't very good right now and it might take a while to sell. in the meantime, I'll have to pay higher mortage next month that i simply CANNOT afford. It's not a matter of spending less, etc - the money simply isn't there. I'm not behind in any payments so but i want to speak to my bank (I'll call on Monday). Please tell me if you think I'm doing the right thing!!
Answer:
I would have a talk with the bank, because they don't want to foreclose on you. That means that they have to sell your condo and try to recoup their loss. You're going on the right track. However this is a buyers market, meaning that your going to have to give an incentive to buy your condo and it may not be in your best interest. Tell the mortgage company that you do not have the money to pay the next month's payment and tell them that you are trying to sell the condo so that they won't evict you. I'm sure they will try to help you as much as possible. I would really try to get the advice of an Attorney, they may be able to give you the best information on how to expedite the process.
Talk to the bank, they don't want your condo. They should try to work with you until you get your condo sold.
I think you are doing the right thing. Try to avoid foreclosure at all costs. Good Luck! :)
The bank can give you an extension. Speak with your loan officer. He will be happy to work with you.
Talk to a realtor who is a short sale specialist before getting into forclosure. They can speak to the lender on your behalf, explaining your hardship ( the bank would rather take $50000 off the price of your loan in a short sale than deal with the foreclosure). Also if you can find some one to piggyback your credit, you can get there credit score in about 30 days.
I agree with Haroon a up above. I also feel you made a bad deal from the beginning.. I'm sorry for your troubles. Hope it works out. LOL
Yes, you have to talk to the bank. They will help you manage the situation because they do not want to inventory property.
You may also want to go to the HUD site. Here is a data base of home counselors that are part of the process before a home forecloses. They are there to help.
http://www.hud.gov/foreclosure/index.cfm...
You may also want to go to http://yourpropertypath.com/artman2/publ...
and call Fannie Mae at 916.408.0494 for some info on foreclosure
you are headed in the right direction---here is a website that details the foreclosure laws and timelines for them
http://www.foreclosures.com/pages/state_...
just click on your state and read.
good luck :)
Hi,
I help people like you on a daily basis. The number one thing you should do is contact your lender and tell them that the terms of your loan have just adjusted and you no longer can afford the new payments and you have depleted all of your savings and have no personal assets to sell. See if they can redraft the note or refi you to get to a lower affordable payment.
If they say no or if what they offer you doesn't fit within your budget, you should look into doing a short sale. It will hurt your credit, but it's better than a foreclosure or a bankruptcy (This is my opinion and you should check with a bankruptcy lawyer and your accountant for proper advice regarding your particular situation).
Even if they accept partial payments, the loan will need to be paid off before you can sell. With the shor sale, the lender will accept less than what is owed in order for you to sell the place and for them to avoid the costs of foreclosing on you.
Regards
EDIT:
You cannot get evicted if you do not pay your mortgage company. You only get evicted once you have been foreclosed on and the property gets transferred out of your control. And trust me, whatever the reason was why you couldn't pay your loan/mortgage, they (the foreclosing lender or new owner) won't care and will still evict you.
Each foreclosure situation is pretty unique, so you'll have to do some research on your state's foreclosure laws and how the bank may proceed with the foreclosure if they sue you for the default amount. Also, start looking at various plans to stop foreclosure and evaluate which, if any, are feasible for your situation.
Here's a list of some methods that can be used to save your home and prevent it from getting to the point of foreclosure. The list of various methods to stop foreclosure that is presented below is a nearly comprehensive accounting of the most common ways homeowners can use to save their homes, either by staying in them and avoiding foreclosure, or by getting out of a bad situation with as much of their financial lives intact as possible. 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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