Foreclosure, at best, is something every homeowner wants to avoid. It also happens to be an extreme solution to a problem that could have been solved in a much better manner if you could act on it swiftly, armed with necessary and sufficient information. A lot of heartache, headache, time, money and effort could be saved if you just paid attention to certain rules and not allow scamsters, fraudsters and others to take advantage of the situation and add salt to the wound.
The approach path to a foreclosure is rather simple – if it weren’t for the agony that accompanies such a path. When the lenders proceed with the foreclosure option, they file a NOD (Notice of Default) which is like a lighthouse to let you know that you are in dire-straits—well, almost. A period of time is usually allowed for you to bring your payments up to date and to allow you to payback what you owe on your mortgage. This is also called as “reinstating the loan”. You might also be allowed to negotiate and willing to work out an agreement with your lender. In case that doesn’t work for you and if you are unable to make any payments after your loan has been reinstated, you are left with just three options: a short-sale, take recourse of a deed-in-lieu or finally, sell your home.
Understandably, none of the options are as rosy as solutions must usually be, but at least two of the three options above might just work to secure your home and prevent it from foreclosure anyway.
Deed-in-Lieu: How does it work?
Instead of giving away the keys of your home to the lender, you might as well sign an official agreement – a deed-in-lieu – which typically transfers ownership of the property “on paper” to the lender. However, under the terms of the deed-in-lieu, you will be allowed to stay at home and live there until you find another home for yourself and your family. You may also make it clear to the vendor that you would still retain the rights to ownership of the house at least as long as the process leading to the foreclosure continues.
Have you thought about short-selling your property?
Depending on the situation you are in, you could consider selling your home for a price that is much lower than the actual value of the property. This is also called as “pre- foreclosure redeemed” is yet another option when faced with the problem of a foreclosure. Needless to say, you will need the help of an experienced real estate agent who has plenty of experience in this matter and must also be highly recommended. Conduct a background check if necessary and certainly research everything you can about the real estate agents you’d deal with here.
Sell Your Home, or at least a part of it
Yet another option for you would be to sell your home . If the real-estate markets are doing well where you live, it might even enable you to pay off a part or even the entire amount outstanding on your mortgage. If your situation isn’t that dire, but when foreclosure seems to be a likely possibility, you might even want to hire or sell out only a part of your property. In either case, you will need to resort to a highly competent, trust-worthy and well-networked real estate agent and also an attorney who can specialize in real estate deals and transactions.
When you get into any of these contracts with any third-party, with the help of the above mentioned professionals, you must ensure that the terms of the contracts are very clear about almost anything that might come up later. For instance, if you were renting out or selling only a part of your property, your contract should have clear terms about selling the remaining part of your property, if needed – the part of the home you still own.