With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
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With the state of the current real estate market, many homeowners across America and Houston are facing difficulties making their monthly mortgage payments. The number of pre-foreclosure homes is steadily rising.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or end up with a foreclosed home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course, this number can vary by bank and situation sometimes.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the owner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.
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How A Pre-Foreclosure Works
Typically when a buyer is purchasing a home for the first time, they may opt to borrow a loan from a bank or financial institution. Borrowing home loans is the most common option for first-time buyers, since making this kind of purchase in cash is not always an option.
When a borrower takes out this loan, they sign a legal document with the lending institution, promising to repay until the loan balance has been paid in full.
As mentioned previously, once an owner falls behind on their payments, typically three consecutive payments, the owner will receive a notice of default. Once notice is received by the owner, a legal filing will be made in court which will then make this a matter of public record.
The foreclosure process involves several steps and the default notice is just the beginning. If a foreclosure is granted by the court a lender will then move forward toward a public auction or trustee sale.
Pre-Foreclosure Options For Borrowers
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If you are a homeowner that has fallen behind on their mortgage payments and may be facing foreclosure, it is important not to panic.
You have options that can delay or even prevent losing your home to foreclosure:
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- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Houston mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a professional home buyer that’s reputable in Houston like us at Millennial Home Solutions, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments. We can buy your Houston Texas area home quickly, often in just a few weeks, will pay in cash, and takes the stress out of trying to search for a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than its market value, and the bank will take the loss as a tax write-off. A lender may agree to do this because it may actually save them the time and expenses it takes to go through a foreclosure process. In some short sales, you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You could request a loan modification from your lender. This process may be similar to what it is like when first borrowing a loan, however in this case you are requesting for your initial loan terms to be modified. If you are approved for a loan modification, you could receive terms that fit your current situation, such as lower monthly payments.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years and can cause significant damage.
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Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with homeowners a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
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- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Houston area house – We buy houses in Houston and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well-educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you recently received a default notice and are in the pre-foreclosure stage… you’ve still got time to fix this situation. distressed, distressed, distressed, letter, letter, letter, sold, sold, sold, deal, deal, related, related, negotiate, negotiate, selling, selling, selling, owners, owners, buying
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure resources. Don’t wait for your house to end up at a foreclosure auction. buying, laws, laws, proceedings,proceedings, listings,listings