5 Ways to deal with Foreclosure

October 15, 2017 | Filed under: Real Estate
Missing payments, can lead to a NOD (Notice of Default). Usually this happens if you miss 3 payments. When the bank starts sending you legal notices, some folks just give up. You actually have a few options to consider.

  1. A Workout. Banks don’t really want the property. So, contact them and try to work out a solution. They have some flexibility. Tacking the payments on at the end. Some sort of refinancing. They want you to get back on track. Foreclosing on you will cost them money, and eventually issues with liquidity of the bank. They don’t want to own real estate and have limitations.
  2. Sell Property or Short Sale. You can sell the property before it goes to auction. If you have equity, you may get some money out of the deal. Even if the offer is less than the mortgage, (short sale), you can sell it (with permission of the mortgage owner).
  3. Bankrupt. Will stop foreclosure. Federal law prevents debt collectors from continuing their collections. This includes lenders. You still owe the money. A Bankruptcy trustee, just helps mediate all your debts. So, it is a temporary situation.
  4. Deed in Lieu. This is a simple process, where the homeowner gives the property back to the bank. It still counts against you on credit. Happens occasionally, the bank is a little hesitant to talk the deed.
  5. Assumption/Lease-Opton. Option you house to a new buyer. You need to make sure you have the right paperwork. All properties have a due on sale clause (transfer of ownership). But usually a Leas Option has a 3-7 percent option consideration fee upfront, which can get the mortgage, back on track. They someone else is pay the rent (mortgage).

Just a few thoughts for you.

 

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