In Pre-Foreclosure? Do Not Worry - read on...
Many houses go on the pre-foreclosure list all the time, your house won't be the first nor will it be the last. We specialize in helping people stop foreclosures. Has anyone gone over your options with you? Click each option below and read
Option 1 - Pay it off!!
The first option that you and any one on the pre-foreclosure list have is that you can pay the house off and just be done with this whole situation! Do you know how much you owe? Being clear with the exact amount owed allows you to plan. Call the bank immediately and find out!
Once you know you debt, look inwards. Do you have any retirement accounts, 401k, IRA, stocks, bonds? Do you have any rental properties you can sell? Do you have anything you can sell that will allow you to just pay the house off?
You get the gist! Let's start to review your other assets and see what we can sell to raise enough money. This is the best way to be truly free from any debt. Don't consider borrowing money as your first option, always try to be debt free!
Option 2 - Reinstatement
The next option that you have is that you can do what’s called reinstatement of loan then make the regular payments going forward. What that means is that you’re going to take all the late payments, all the late principal, all the late interest, all the lawyer fees, all the legal fees, all the fines, all the penalties, and all the late taxes - your going to take all of that and pay that in one lump sum and then your going to the make your regular payments moving forward.
The trick is, once you make all that payment i.e. 'reinstate' your loan/mortgage you have to maintain your monthly payment moving forward or you are right back to where you started. Do you have a friend or a family member that we can call
to borrow money to pay that reinstatement? Just remember, borrowing from friends or family has its disadvantages so make sure you have a plan to pay them back as soon as possible.
Option 3 - Loan Modification
The next option you have is you can do what’s called a loan modification. What that means is bank is going to take all the late payments, all the late principal, all the late interest, all the lawyer fees, all the legal fees, all the fines, all the penalties they’re going to take all of that and stack it on top of the end of the loan so you actually owe more than you do before.
Now, the bank is going to give you a teaser interest rate of payment for 3 to 6 months, sometimes the payment goes down sometimes it goes up, but if you’re a day late on any of those, you’re right back where you are now except for now you owe more money than you did before. Now that's not good, so you if do a loan modification you better be ready to meet up with your monthly payments moving forward.
Option 4 - Temporary Restraining Order
Did you even know this was an option? You can file for a temporary restraining order or a TRO. What that means is you’re just going to hire an attorney, they’re going to file a restraining order against the bank that says they can’t talk to you. If they can’t talk to you, they can’t foreclose on you!
Now, it's best if you have something definite and major happening in the next thirty days, that will give you better leverage against the bank, else another thirty days late on payments, another thirty days late on interest, another thirty days late of
principal another thirty days of lawyer fees, legal fees, fines, penalties, taxes…The whole process of getting a lawyer going to cost a few thousand dollars, so if you got something definite and major happening in the next thirty days it could be a good fit, otherwise we’re just another thirty days late on everything.
Option 5 - Bankruptcy :(
Now this is an option I do not like at all. It’s the worst thing you can do to try to stop your foreclosure because it doesn't really stop your foreclosure. Foreclosure is the worst thing that can happen to your credit. Bankruptcy is the second worst thing.
What a bankruptcy is going to do is you’re going to hire an attorney, it’s going to cost 3 to 5 thousand dollars, you might be getting advertisements for $500 for bankruptcy, its 500 bucks to get it started. The very first thing that the bank is going to do once you file bankruptcy is they’re going to sue to have the house removed
from the bankruptcy, the very first thing. Filing for bankruptcy is probably going to buy you a maximum of 3 months. At the end of 3 months you could be further behind on payments so watch out!
Also bankruptcy can affect your ability to get credit cards, loans, buy a new job, even get a job (in certain instances), so be careful, think
Option 6 - Sell your house..Save your credit
If you've not been able to raise money to reinstate your loan or apply for a loan modification, then it might be time to start thinking about selling your house. Look at it this way, selling that house and saving your credit gives you the opportunity to fight another day. Now, you might not be ready to let go of your home, however, leaving it without a solution is also not a good option. If your house goes into foreclosure it triggers the following:
the bank takes back the home and tosses all your property out.
they will then come after your finances, issuing a 1099 to try to force you to pay whatever they couldn't make when they sold your home at auction
the IRS can garnish your wages up to 10 years
getting a credit card, a car note, a loan might be very difficult
Save yourself the trouble, and do whatever you can to prevent your house from going into foreclosure, your name, credit and future is on the line!!
Want to learn more about how to we can help you save your house and Credit? Fill out the form below or call us at 713 364 3860