Foreclosure is the legal process whereby a lender tries to retrieve the amount owed on a defaulted loan by reclaiming ownership of and reselling the mortgaged property. Usually, this default is prompted in situations when a borrower misses a number of payments per month, though it can also happen when the borrower doesn’t meet other terms included in the mortgage document.
In 2020, 214,323 homes suffered foreclosure. It took these homes an average of 830 days to complete the foreclosure process. “Foreclosure doesn’t happen overnight”, says the Department of Housing and Urban Development (HUD). Facing the prospect of foreclosure can be daunting, but it actually isn’t always inevitable. Let’s talk about different ways thanks to which it is possible to halt a foreclosure process.
Initiate a discussion with your lender
If a temporary setback has prevented you from making your mortgage payments for a certain period of time, but you’re now or will be soon able to continue making the full payments each month, start talking with your lender. You may be able to agree on a repayment plan to get your past-due loans sorted if you can’t afford to immediately pay back the lump sum.
Modify your loan
You may not be able to make your monthly mortgage payment. In that case, you could try modifying the terms of your loan. This could reduce your monthly payments or interest rate, depending on your situation. You might also be eligible for the government Homeowner Affordability and Sustainability Plan (HASP), which could allow you to restructure your mortgage. The Homeowner Affordability and Stability Plan (HASP) was initiated in 2009 – it has enhanced homeowners’ ability to modify their mortgages at lower interest rates and decrease their monthly loan payments.
Be careful you aren’t acting too late
Depending on your state’s laws, once you are a set amount of months late on your payment and you haven’t attempted to pay towards your default, your lender will begin the foreclosure process and schedule a sale. From that point, your home will be auctioned off and your foreclosure is shown on the public records section of your credit report, usually for 7 years once it has been entered.
There are things you can do to avoid the foreclosure process, but you’ll need to act quickly. It is easy to fall into a state of denial when faced with such a stressful situation, and run out of time to deal with the foreclosure in the best possible way. If you have drained all your options for finding an arrangement with your lender to stay in the property, selling your home as fast as you can might be the only solution to avoid foreclosure.
However, selling a home through a realtor often takes a lot of time. The National Association of Realtors (NAR) has estimated it takes 70 days from listing to closing. You may not have that amount of time before it is too late. Here at Wasy Homes, we are specialized in expediting sale processes. As a cash buyer, we can help you get out of the tricky situation that is a foreclosure and buy your home from you, fast.