Your Best Options on What to Do after Getting a Foreclosure Notice
You know you’ve missed several mortgage payments, but you just can’t seem to get back on track.
And then, it happens.
You get a foreclosure notice. And the realization hits you—you’re going to lose your home.
Take a deep breath. Relax. It’s going to be okay.
Here’s what you need to do after you get a foreclosure notice and how a cash buyer can be of service if you choose to sell your home.
What Are My Options After Getting a Foreclosure Notice?
You have several options when it comes to foreclosure, including actions that delay the process as well as selling your home before it’s taken from you.
Begin by educating yourself on the foreclosure process and how it’s handled in your state. Then, pick up the phone and start asking questions.
Call Your Lender
You won’t know if your lender is willing to work with you unless you ask about your options. Most mortgage companies would rather find a way to let you keep your home than repossess it.
There are a few scenarios that could arise from a conversation with your lender:
- Refinancing: a new loan with rates and terms could lower monthly payments
- Repayment plan: work to continue making payments and make up late ones
- Forbearance: temporarily suspended payments, add to the end of the loan
- Loan modification: change existing loan terms to make payment manageable
Federally-funded agencies also work with lenders to help homeowners facing foreclosure. A HUD-approved housing counselor may be able to investigate your situation.
File for Bankruptcy
Filing for Chapter 13 or Chapter 7 bankruptcy will impose an automatic stay on your assets and pause the foreclosure process. However, your credit will be severely impacted.
- With Chapter 13 bankruptcy, you’re placed on a repayment plan to pay off your late payments, but you get to keep your property. You must have enough income to afford both the late payments and current ones. The plan usually lasts three to five years.
- Chapter 7 bankruptcy eliminates your debt and allows a court-appointed trustee to sell your nonexempt property to pay your creditors. A low income is required to qualify for Chapter 7. The process takes around four to six months, then the court will discharge the remaining debt.
There’s one more thing to note about Chapter 7 bankruptcy. If your home was already scheduled for a foreclosure sale, filing will likely postpone the sale for three to four months. However, the lender can file a motion to lift the automatic stay and proceed with the sale.
Deal With Foreclosure
After you’ve explored options with your lender and consider filing for bankruptcy, you may think about just accepting the foreclosure and dealing with the loss of your home. If you choose this route, there are several repercussions.
The most immediate concern is you have to find a new place to live. The problem is: If you didn’t have enough money to make your mortgage payments, then you probably lack the funds to put down a security deposit with a landlord. Plus, the fact that you are going through a foreclosure does not make you an attractive tenant.
Instead of applying for an apartment with a rental management group, consider talking to smaller landlords or individual homeowners You may be able to explain your situation and how you plan to pay rent. If someone has a vacant property, they might be willing to take a chance on you.
Other consequences of foreclosure include:
- Managing credit fallout and other creditors
- Mandatory waiting period before another mortgage approval
- Getting a surprise tax bill after losing your home
- Applying for jobs that involve handling money
If you would like to own another home, you won’t have to wait as long if you file for bankruptcy instead of going through foreclosure. The waiting period for mortgage debt discharged through bankruptcy is around two to four years compared to seven years for a foreclosure.
Sell Your Home With an Agent
Here’s some good news: there’s one more option if you do not want to file bankruptcy or go through a foreclosure.
Sell your home.
But, wait, can you sell a house in foreclosure?
Until the time your home is sold at auction or the bank takes possession, your house is considered to be in pre-foreclosure. If you hire a real estate agent, they can crunch the numbers to determine how much money you could get for your home and if that would be enough to pay your debt.
Your lender may agree to a short sale because the foreclosure process is such a headache. A short sale is when your lender lets you sell your home for less than you owe. Taking this route means you would avoid foreclosure and bankruptcy—plus your credit would not take a huge hit.
Sell Your Home to a Cash Buyer
Selling to a cash buyer in foreclosure is the easiest and fastest way to alleviate the burden of a home you can’t afford.
The buyer does not need to secure financing since they’re paying with cash, so things can move quickly. All you have to do is agree on a price then take the necessary steps to close the sale.
If you and the investor agree on a price that is less than what you owe the lender, it’s still considered a short sale. However, the process will be quicker than normal because you’re bringing a cash buyer to the lender and not someone who needs to be approved for a mortgage.
Selling a House After Foreclosure
Now you know what to do after getting a foreclosure notice and how a cash buyer can step in and make selling your home easier.
First, educate yourself about what is happening and call your lender to explore your options. If you find yourself still heading toward foreclosure, you may consider filing for bankruptcy. Or you could try to sell your home before foreclosure is final.
If you’ve accepted the fact that you can’t afford your home, selling to a cash buyer in foreclosure is the simplest way to ease this burden. Contact New Again Houses and we’ll make a fair and fast offer so you can move on with your life.