Option 1: Loan Forbearance or Modification - A strategy worth pursuing is called a loan forbearance. The loss mitigation department of your mortgage company may make arrangements with you to pay some of the back payments now and the balance within a certain time period. A typical example – You owe $9,000 in back payments, attorneys’ fees, etc. Your mortgage company may accept $4,500 now and $750 per month for the next 6 months. Of course, you would have to resume making your normal monthly payments. A loan modification is a permanent change to your mortgage that may lower your payments and the delinquent payments may be added to the mortgage balance. A loan modification or forbearance is easier to arrange prior to the Mortgage Company filing a foreclosure lawsuit. Some lenders will not consider this after filing, but it’s worth trying.

Option 2: Reinstate Your Mortgage - You have up to and including the last business day before the auction to catch up your payments. Perhaps you could borrow from friends or family, credit cards or retirement program. You may be able to arrange a second mortgage to catch up the back payments and fees. Check in the Yellow Pages under "Mortgages". There are a number of companies listed that claim they can help in these situations. Watch out for scams, however.

Option 3: Refinance - You’ve probably received letters from mortgage brokers and lenders saying you are already pre-approved for a new mortgage. The fact is that is very difficult to arrange new financing when you’re already in default on your existing mortgage. Be very cautious about sending advanced fees of $300.00 to $600.00 to lenders or mortgage brokers. Usually it’s a ploy to take advantage of your financial situation.

Arranging new financing will depend on your income, credit report, value of your home and the amount of your equity. If you’re not sure of the value of your home, give me a call. Usually I can give you a fairly accurate estimate of value. I would be glad to help and of course, there’s no obligation. If you attempt to refinance, you should always have a backup plan available to you. Many times, I have had homeowners call days before the auction saying their financing did not go through, and then it’s too late!

Option 4: Chapter 13 Bankruptcy - A viable alternative if your financial situation has improved, filing bankruptcy prior to the auction will stop the sale. Unfortunately for most people, it only postpones the sale for one or 2 months. Immediately after filing a Chapter 13 Bankruptcy, you will have to file a repayment plan with the courts. This plan has to show that you have sufficient monthly income to pay basic living expenses such as food and utilities and other monthly payments such as credit cards, car payments etc. In addition, your income must be sufficient to resume making your monthly mortgage payments. All past due amounts are usually spread out between 24 and 60 months i.e. If you owe $9,000 in missed payments, attorneys fees, etc. if spread out over 48 months would be an additional $187.50 due each month to the court appointed trustee. If you feel as though you have the income to immediately begin repayment of all your debts and the courts agree, this may be a good choice for you to save your home.

You should know, however, that with the tougher bankruptcy laws, many individuals who have filed for bankruptcy protection have had their cases dismissed. Not only were they out their attorney’s fees (usually $1,000 - $2,000) but now had a bankruptcy and foreclosure on their credit report. Bankruptcy is considered an action of last resort. 

Option 5: Sell Your Home on the Open Market - Selling your home on the open market will give you the most money in your pocket. Unfortunately, with the current real estate market slump it may take you 6-9 months or longer to find a buyer - even longer if you don't have the money to fix up your home before offering it for sale.  When you are facing foreclosure, this is time that you do not have.  It may be worth a chance, however, to put a For Sale By Owner sign in your yard.

Option 6: We Can Buy Your Home - If efforts to save your home have been unsuccessful and time doesn’t permit selling your home on the open market or you just don’t want to, but want a quick sale with no problems, call us. We’ll make every effort to make you an offer that will allow you to keep a foreclosure off your credit history, as well as a few dollars extra in your pocket. 

You have probably been swarmed by investors calling you and knocking on your door. If not yet, you soon will be. A Word of Caution, some investors are very aggressive and unethical. Some investors will tell you that "You only have one or two weeks before the auction and your furniture and possessions will be placed on the sidewalk or street." This scare tactic is usually accompanied by a ridiculously low offer. 

The fact is you have several months before that could happen, but this is not a time to sit back and relax but for you to pursue one of the options available to you that makes the most sense for you and your family. Don’t be rushed or scared into giving up your hard-earned equity. If a quick sale of your home is your goal, talk with several reputable investors, including us. We can promise that we will treat you fairly, with dignity and complete honesty. When we make you an offer and say you will walk out of the closing with $1,000, $5,000, or $20,000, that’s what you will walk out with!   We don’t believe in last minute negotiating at the closing table.

If you are looking for a quick – no problem solution, contact us at 803-361-2739.

If you do not take advantage of one of the previous options before the foreclosure on your house takes place, you will be forced to accept...

Option 7: Let Your Home Be Sold by the Court - By far, the worst option available to you! Many people feel "I have no equity, let the bank take it", but homes that are sold by the court typically sell between 50% and 70% of their fair market value. Moreover, if a bank suffers a loss due to the pending foreclosure action against you, they also have an option. They can file a deficiency judgment against you and pursue you for the amount of their loss.

Typically ten days after the foreclosure auction, a certificate of title will be issued by the courts to the new owner. If you have not voluntarily vacated your house at this time, you could be forced to move out within 24 hours.

If we can help you, please call us today at 803-361-2739.

As with any serious legal situation, you are encouraged to consult legal counsel regarding any points of law. This information should not be used as a substitute for competent legal advice.