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Understanding the Foreclosure Process

There are ALWAYS options.

If there is one thing that we hope you take away from this article it is that there are ALWAYS options. 

 

Many people simply assume that once they’ve received Foreclosure Complaint or NOD (Notice of Default) there are no actions that can be taken to resolve the issue.  We will share with you why this is NOT the case and what you can do should you ever find yourself, a friend, or family member in this situation.

After years of working with people in our community, we’ve come to realize that there is an endless number of reasons why someone can experience foreclosure. 

 

Nobody is immune to foreclosure, and often times a mix of bad fortune and lack of available support drags homeowners into a default situation:

  • Significant healthcare expenses

  • Loss or decrease in income from a job

  • The passing of a loved one

  • A divorce or separation

  • Etc.

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There are two common types of foreclosure:

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  • Loan/Mortgage Foreclosure:

    • Initiator: the financial institution that holds the note on the property.

    • Timeline: the foreclosure process begins with the county/court system after 90 days of missed payments.
       

  • Tax Foreclosure:

    • Initiator: the County in which the property is located.

    • Timeline: the foreclosure process begins with the county/court system after two years of delinquency on property tax payments.

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When the foreclosure process has begun, you must understand very quickly that there is limited time to make a decision.  If you cannot see a means of catching up on payments immediately, you will need to pursue one of the options outlined below. 

 

This can be an extremely difficult situation and an emotional decision.  But, realizing that you aren’t able to catch up on payments and swiftly moving forward with one of these paths can potentially save you years of continued hardship if the foreclosure process were to finalize.

  1. Cash Sale – The ideal route to sale if the home needs many repairs and lots of updating OR you are looking to avoid working with a realtor and going with a traditional sale.  Many times, people would rather not pay agent commissions, have people walking through their home constantly, and perhaps not selling for months or even at all.
     

  2. Traditional Sale – Communicating to the public that your property is for sale, typically through a licensed real estate agent.
     

  3. Short Sale – Executed when the mortgage amount on a home exceeds the actual value of the property.  In this instance a cash sale or traditional listing will not be possible.  You will need to partner with an agent or attorney who has experience with the legal proceedings of a short sale.  The agent/attorney will be negotiating with your lender on your behalf.  A short sale is a very beneficial tool that can eliminate the burdens of a foreclosure.  The process is cumbersome and tricky to navigate, so having a strong team is imperative.

There are ALWAYS options for those who find themselves in a foreclosure scenario.  We would love to hear from you if you have any questions regarding the process or intend to move forward with one of the paths mentioned early.  Having a strong team around you is important and our goal is to be that resource for you.

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