Tips & Advice
Do I have any options now?
When people bring up foreclosure, they might be referring to any one of several different notices and stages that a lender may issue along the way. If you’re worried that you may be in or headed for foreclosure, let’s make sure you know where you are in the process, and what it might take to get current.
Don’t panic! Before you give up and let them have the house, or file bankruptcy, let’s figure out what stage you’re in, and what options you have.
You may have positive equity, or perhaps you have other options to take back control: either to bring your mortgage current and stay in the home or sell the home on your own terms.
You may have more time than you think; take action early!
Foreclosure is a long process; you probably have more time to fix things than you think, but the sooner you start the better. Along the way, your mortgage company is required to move through a series of steps and communicate with you often. Just because they send you something that includes the word “foreclosure” doesn’t mean you’re there yet.
But the sooner in the process you start working the better off you will be.
Most states require 6 phases for foreclosure
At all 6 of these phases, mortgage companies are likely to include statements about foreclosure, because they are required to warn you of the final consequences if the debts on the property are not brought up to date.
1. Notice of Missed Payment
2. Demand Letter
3. Notice of Default (NOD) 90-120 days behind on payments
4. Equitable right of redemption – you have to pay off the debt, penalties, and fees
5. Lender takes ownership of the property in order to sell it
6. Property goes to auction – owner may or may not be in the property
Best Practices
Explore your options as early as you can. Too many people get overwhelmed, give up, and let the bank take the property. The sooner you take action, the better chance you have of reducing penalties, and fees, and catching up on all debts to stay in the property. Or, if you decide to sell the property on you own terms, you are still more likely to preserve some equity and save money in the long run.
Regardless of where you are in the process, notices using words like foreclosure are unsettling. Before you panic or give up, take a deep breath, and start making a list of your options. It’s better to sort through your options as soon as you can, and work to catch up or sell, or take steps to sell the home on your own terms.
Reading is a good start, but it doesn’t always answer all of our questions. Sometimes you need a conversation partner – someone to bounce off of with your ideas and questions. We can do that too; we’re a phone call away.
