If you can’t afford your adjustable rate mortgage (ARM) and experiencing financial setbacks, foreclosure may be on the horizon. But don’t worry — there is a fast solution to your problem! Before we dive into solutions, let’s discuss the types of foreclosure, how to avoid it, and how to stop it.
What is foreclosure?
Foreclosure is the legal process in which a lender attempts to recover the amount owed on a defaulted loan by taking ownership of and selling the mortgaged property. Typically, default is triggered when a borrower misses a specific number of monthly payments, but it can also happen when the borrower fails to meet other terms in the mortgage document (Investopedia). The foreclosure process varies by state, although lenders try to work with borrowers to get them caught up on payments and avoid foreclosure. The average number of days for a foreclosure process is 673; but this varies greatly by state.
What are the types of foreclosure?
Zillow identifies two types — judicial and non-judicial.
Judicial Foreclosure: In the event of a judicial foreclosure, a civil lawsuit is formed against the borrower. Everything is handled by the legal court system, and a notice of pendency is performed. The court will either agree or disagree on the lender’s decision, and then the notice of the sale is published. This usually takes 4-8 months.
Non-Judicial Foreclosure: In the event of a non-judicial foreclosure, a deed of trust expresses an interest in real property to a third party to hold as security repayment of debt. At this point, the trustee is able to begin foreclosure. A Notice of Default is recorded and the borrower is given a deadline to repay what he or she owes. A Notice of Trustee’s Sale is recorded and then the auction is decided on. This typically takes up to 12 months.
What can I do to avoid foreclosure?
If you’re having difficulty paying your mortgage, we suggest contacting a loan servicer. In fact, the Federal Deposit Insurance Corporation states that you have to work directly with your servicer or counseling agency. In general, offers that seem too good to be true are usually a scam. Trust your gut, stay safe, and scope out reputable services. In addition, carefully track your budget and expenses, and look to see where you can minimize.
How can I stop my house from being foreclosed?
You have a few options (and we’ll save the best for last)!
Step #1: Contact the lender as soon as possible.
Step #2: Consider modifying your loan, revising your payment plan, reinstating, forbearance, or whatever options are available to you.
Step #3: Refinancing your loan.
Step #4: Sell your home.
If you’re in the Bay Area in Maryland and this sounds like the best option for you, we buy houses fast and for cash. All it takes is four easy steps. You’ll speak with one of our experts, schedule an appointment, receive a fair cash offer, and choose your closing date. The offer is free, and you’re under no obligation! Contact us today to get started.