How to deal with foreclosure

How to deal with foreclosure

15 Jun How to Deal with a Foreclosure

What is Foreclosure?

Foreclosure is the process of taking possession of a mortgaged property as a result of the mortgagor’s failure to pay mortgage payments.

After you miss one or more mortgage payments, the process leading up to an actual sale of the foreclosed property can include a grace period, demand letters, notices of default, a recorded notice of foreclosure, publication of the debt, and a foreclosure auction or repossession by the lender.

How to deal with foreclosure

How to Deal with a Foreclosure

Foreclosure has become a more common occurrence over the past 2 decades, with a record of 2.8 million properties were served with foreclosure notices in 2009. Despite how familiar we may be with foreclosure, receiving a notice on your own property can be alarming and stress provoking.

However, a foreclosure notice doesn’t mean that you have run out of options. Many foreclosure counseling services estimate that at least half of these notices won’t result in a foreclosure on the property. Many homeowners can find alternatives to foreclosure before they lose their property before they receive a notice to leave. Here’s some simple advice for dealing with a foreclosure:

    1. Don’t give up. You can still avoid foreclosure after you miss a mortgage payment or receive a notice of default.
    2. Get informed . Review your original mortgage paperwork and all of the correspondence you’ve received from your mortgage provider. Give them a call if you need clarification or are unsure about what your rights are. Research your state’s foreclosure laws. Speak with a foreclosure avoidance counselor approved by the U.S. Department of Housing and Urban Development.
    3. Weigh your options. Remember that the traditional foreclosure process is not the only way to remedy your mortgage default. Read more about these options below.

Three Alternatives to Foreclosure

Experts say that the majority of homeowners find alternatives to foreclosure by negotiating with their lenders, sometimes with the assistance of counselors. There are three commonly known ways you can avoid missed payments resulting in a foreclosure: forbearance, modification, or short sale.

Forbearance: A forbearance functions exactly as it sounds. You and your mortgage provider agree to temporarily decrease or suspend your monthly payments for a fixed period of time. This allows you time to deal with any short term financial issues you may be facing and resume timely payments.

Modification : If this is an option for you, you and your mortgage company will work together to revise the original terms of your loan. This can include adjusting the payment amount, length of the mortgage, interest rate, or loan type. Usually the goal is to reduce the monthly payment amount so you can resume timely payments.

Short Sale: In a short sale, you sell your property to a third party for less than the amount due on the mortgage. All of the proceeds from the sale will be paid to the mortgage lender and is a means paying down the mortgage loan and avoiding the full foreclosure process. Your lender may agree to forgive the balance of the loan (this is the law in some states) or they may seek a deficiency judgment requiring you to pay the balance owed on the mortgage.

How to deal with foreclosure

How Can Housale Help with a Foreclosure?

Housale helps you sell your property quickly at a fair price. We believe everyone should have the option to sell their home before they lose it to foreclosure. Housale can help you eliminate spending on realtor or short sale services and maximize the proceeds you can use to pay down your mortgage. You can receive a fair offer from our expert real estate appraisers and is yours to accept. You can close in as soon as 24 hours or up to 90 days later.

Beyond the situations that have led to the loss of the home itself, receiving the news that your home is being foreclosed upon can be a devastating situation. While this development can be quite stressful, it is important that you seek ways to move into a calmer headspace so that you can figure out what the next steps may be. If you are dealing with the understandable overwhelm caused by the foreclosure of your home, here are five tips on how you can cope with the stress of this foreclosure moving forward.

How to deal with foreclosure

Coping With a Foreclosure

1. Take time to understand what the foreclosure process will look like

The word “foreclosure” is one that can be quite uncomfortable to hear, but it is important that you know exactly what foreclosure will look like in your particular situation. For example, let’s imagine that you live in Louisville, Kentucky. The Kentucky foreclosure process is one in which a court-ordered sale is conducted by the circuit court master commissioner. Generally, a mortgage company will file a Lis Pendens (pending litigation) notice, paving the way for the foreclosure process (or, if not, giving a good faith purchaser the ability to get the property without a non-consensual lien).

The lienholder will then file a foreclosure detailing the situation and starting the foreclosure. At this point, you, the homeowner, could either decide that you want to keep the home and file for Chapter 13 bankruptcy (thus ending the foreclosure process) or let the house go back and file for Chapter 7 bankruptcy. With that in mind, it is important that you file an answer as not filing can lead to a default judgment that causes you to lose the home anyway.

If you are facing foreclosure, reach out to an experienced local bankruptcy attorney like Nick C. Thompson for assistance in handling your case and making the right choices as you navigate this process.

2. Find small ways to squeeze in relaxation in your day-to-day life

No matter how much stress we are under, it is important to find ways to squeeze relaxation into our day-to-day life. One excellent solution that many have been turning to for help with stress and anxiety is cannabidiol (CBD). CBD is a naturally occurring substance found within the hemp plant that is purported to have anxiety and stress-relieving properties. As a result of its growing popularity as a wellness tool, there are plenty of ways to absorb the substance, with one of the best absorption methods being smokable hemp products.

If you are just diving into the wellness world of CBD, continue purchasing a high-quality product like Plain Jane’s hemp cigarettes. Whether you are looking for an odorless pre-roll experience, a hemp cigarette packed with flavor, or a more classic feel with a menthol addition, Plain Jane offers a host of CBD hemp cigarettes for interested customers to choose from. Additionally, they focus on providing the best experience possible by making their products more affordable, sourcing hemp from local farms, and using high-quality hemp in all of their products. With the purported stress-relieving benefits of CBD, you will be able to kick back and relax whenever you need to.

3. Come up with a plan of actions that details your next steps

In times of uncertainty, we tend to focus on the lack of control that we experience as a result of the situations developing around us. Understandably, this feeling that we have lost control can be quite stressful. Instead of focusing on that which we have no control over, create a plan of action by getting organized, breaking your situation down into more manageable chunks, and figuring out the steps that you will need to take in order to move forward and out of the problem you are facing. Foreclosure may cause extreme stress and feelings of uncertainty. However, we can take back our calm and control by figuring out what we are able to do next.

4. Continue to take care of yourself

Stressful situations that enter our lives have the potential to throw us off and lead us to ignore our overall health and well-being. When this happens, we can often fall deeper into our own feelings of sadness and frustration, making us more vulnerable to the mental and physical impact of stress. Even though foreclosure can be scary and stressful, do your best to continue taking care of yourself. Get plenty of sleep, eat a healthy diet, and exercise regularly. Making sure that you are taken care of physically and emotionally will better support you in your efforts to cope as you face this challenge head-on.

5. Turn to your support network for support

Major life situations like foreclosures can cause us to feel like we are taking on the world by ourselves. In instances like these, we all need a little help to keep our heads above the water. Make sure to use your social support network of friends and family to vent about your feelings, get away from your troubles for a bit, or seek out advice as you work through this.

If you feel like you may be dealing with more complicated emotions that you need help with, turn to a mental health professional and consider finding a support group that may be able to help you work through more complex grief. No matter how you may be feeling, there are people out there who want to support you and help you cope with these intense emotions.

Falling into financial hardship and subsequent foreclosure is something that can take a major toll on our emotional health. In order to help you better cope with these developments, use the five tips provided above to help you calm down, assess your situation, and take the necessary actions to pave the way for a better tomorrow.

Mastering Foreclosure Negotiations

How to deal with foreclosure

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How to deal with foreclosure

This step-by-step, real-life negotiation process details the experience of a buyer dealing with a bank for the purchase of a foreclosure property. The bank bought the loan in a package separate from the original lender—or at least the one who had been holding it when the default occurred.

The negotiations took a little over a week and a half, and the bank seemed to intentionally disregard the problems of the home they were trying to unload. But, in the end, the buyer triumphed because they didn’t quit and took all factors into consideration.

The Foreclosure Facts

The value of the home was between $225,000 and $300,000 in better times. The original list price by the bank was $179,000. The buyer’s offer was made six months or so later when the home was listed at $119,900.

The home needed a new septic system on a lot that was too small for a leach field in an area with very strict environmental laws. The process to receive the variance for holding tanks was expected to take from 30 to 45 days, with an outcome that wasn’t guaranteed.

The bank was very clear that it would make no representations as to the condition, and it would not pay for any repairs.

The Buyer’s Offer

The buyer received some initial ballpark estimates for the septic work before they made the first offer. There were no other offers on the table at the time, although the home was being shown a bit. It appeared to be in surprisingly good condition, requiring the addition of a heater for immediate occupancy if the septic was right.

The buyer offered $108,000 with 20% down, contingent upon the granting of the septic variance and the seller paying $10,000 for septic installation before closing. The buyer’s lender required that.

The home was a steal at the full asking price, even if the septic had to be replaced after closing at the buyer’s expense. But the buyer didn’t have sufficient cash to do that, so it had to be done by the seller or it at least had to be financed into the price.

Items of Contention

The bank would only use counteroffer forms, reiterating each negotiation item in each. The forms seemed to be computer-generated.

The bank wanted a closing date too soon to guarantee that the variance could be approved in time and the septic installed before closing. It wanted $100 a day from the buyer if he went past that date “at no fault of the seller.”

The bank’s first counteroffer stated that it wouldn’t pay for a survey, but it would credit the buyer $1,500 toward their closing costs. It didn’t offer to pay anything toward the septic installation. The counter was at the full list price of $119,900.

The Negotiations

Negotiations centered around the sale price, the septic cost, the survey/closing costs, and the $100-a-day damages clause with the short period until closing. Every counter from the buyer asked for more and to remove any payment of damages if the buyer couldn’t get these items completed in time due to delays at the county.

The Outcome

In the end, it took some creativity to get the deal done, but it got done. The buyer made a final counteroffer and the bank came back with an OK on it.

The sale price would be $120,500, although the buyer had gotten the bank all the way down to $112,000 during the process. The seller would pay an upfront fee of $1,500 to get the septic variance process done, as well as $10,000 for a new septic system and $500 toward buyer closing costs. And the closing date was extended.

How Did That Happen?

The buyer got the bank to take the deal and shell out $12,000 by sending the final counter with the sale price increased from $112,000 with almost no other concessions.

That’s a net selling price of $108,500, but the buyer wouldn’t need any cash other than the 20% for the down payment and other closing costs. It was a great deal for the buyer, who would close on a home that was move-in ready $50,000-plus in immediate equity.

Never Quit

The point is to never quit with a bank. As long as they keep coming back with counter-offers, you do the same. At some point, you’ll make a deal, and it might be better than you ever expected.