ALWAYS AVOID FORECLOSURE!
The worst way to lose a home is through a foreclosure. We call foreclosure “the atomic bomb of credit scars” – it cuts the deepest and lasts the longest. When something effects your credit negatively, it lowers your credit score and the effects last for varying periods of time. Foreclosure lowers your score the most and for the longest period of time – up to 7 (or more years).
Some distressed homeowners reach the end of their patience and decide they simply want to “walk away” from a home believing that foreclosure will be the end of their problems. The truth is that foreclosure is the beginning of an 8-10 year nightmare that can involve everything from an eviction by the sheriff, embarrassment, battling creditors for years, deficiency judgments and lawsuits, possible tax ramifications that can even lead to garnished wages, and difficulty getting credit cards, car loans, or even many types of employment for up to a decade.
If you are facing foreclosure or in a home that you cannot afford to keep and want to sell, please contact Mike, so that we can get you all of your options for selling your property and avoiding foreclosure.
How to stop a foreclosure:
- Call Mike at Real Property Hero and we (you, the property owner, and me, Mike) will call and ask for a delay (This can work if we have the right things to say) From the Bank we will get 1) The Payoff statement (good through the foreclosure date). 2) The Reinstatement Quote 3) The Escrow Analysis.
- Send the bank a signed contract Fast Cash Offer with Real Property Hero, that closes after the auction (Includes a pre-qualification letter or a proof-of-funds letter)
- Working with points 1 and 2 above, we again call & threaten for a delay (works well when they tell you they can’t give you a payoff/reinstatement in time – say “If you foreclose we will sue you and force you to rescind the auction because you didn’t give us proper notice of the foreclosure and you are not cooperating in a timely manner to get payoff info”).
- Ask for a partial payment to stop the auction (Good Faith) or a Forbearance Plan – rarely works but worth a try.
- Start a Loan Modification.
- Start a Short Sale (you can’t start both a loan mod and short sale at the same time).
- File a Temporary Restraining Order (TRO) at a cost of $2-3K – delays it long enough to get you past the auction and typically close it within 1-2 weeks.
- File a Bankruptcy at a cost of 1K for filing and $3K if completed – Bankruptcy is effective when trying to wipe out other debt but it causes at least a 30-120 day delay in closing.
When trying to close a sale prior to the foreclosure auction, here is some helpful advice:
- Always get the payoff and reinstatement amount that is good through the day of the auction.
- Always try to close on the property the Friday before the auction (so the funds can reach the lender in time).
- Always ask how the lender wants to receive the funds; usually a wire to the lender, but sometimes a check to the lender (overnight), a check to the Trustee (lawyer who is foreclosing), a Western Union, etc.
- As a last resort, also check to see if you can bring funds directly to the auction and reinstate on the day of the foreclosure (prior to the sale taking place).
Note: as you get closer to the auction (i.e. less than 4 days out), sometimes your only option is to do a bankruptcy, but don’t let it get to bankruptcy, because there are a handful of better options than that. Don’t turtle shell and hide, trust us, we can help you. A foreclosure is the worst thing to happen to your financial situation.
Make sure all the parties on the deed are present at the meeting. If not all parties sign the contract then you don’t have an “enforceable contract”.
Call Mike at Real Property Hero AS SOON AS POSSIBLE!