Can I Sell My House Before Foreclosure
In the face of a financial climate that is changing by the day, many Americans may find themselves facing the unfortunate situation of foreclosure. This can happen for any number of reasons, but if you find yourself on the wrong side of a foreclosure, there are still actions you can take to make sure you come out ahead.
PPS House Buyers specializes in selling homes, no matter what the circumstances are, including foreclosure. We consistently work with hundreds of customers that ask us, “can you sell my house fast and avoid foreclosure?”
The answer is YES. Our team can help you sell your home FAST – even if you’ve already been foreclosed on!
What Happens in the Foreclosure Process?
A foreclosure on a property occurs when the homeowner fails to pay the mortgage. Basically, the owner forfeits all rights to the property when the mortgage lender is not repaid according to the terms of the mortgage loan. A missed payment or two does not initiate foreclosure proceedings.
The “trigger” event for falling behind with missed payments will vary by lender. However, once a hardship is established at the mortgage servicer, your mortgage loan might be transferred to the loss mitigation department where there is an opportunity to work out a repayment plan. The goal of the mortgage company is to avoid a foreclosure sale.
At times they will offer a loan modification, and even add missed payments and past due amounts to the balance of your loan. This can help some people facing foreclosure if they had a temporary job loss or difficult situation that has cleared up. If you can resume making your monthly payment the mortgage holder will not take further action or pursue judicial foreclosure. After all, this costs them money in legal fees.
How To Prevent Foreclosure: What if Plans Change?
If things change and missed payments continue to occur, the foreclosure process will continue to advance. If the owner cannot pay the outstanding debts they have on the property, or they can’t sell the home through a short sale, the property will be issued a foreclosure notice and eventually go to foreclosure auction. Once a foreclosure sale occurs, it’s too late for the homeowner to do anything.
It’s important to remember that if you’ve fallen behind on your monthly payments, you should reach out to your lending institution. They may be able to remedy your situation, or come up with a plan to make you current. Remember: your lender does NOT want to foreclose on your home. Foreclosure is a time-consuming and expensive process when dealing with liens, and almost always results in the lender losing money. Houses they buy back at the foreclosure sale often have deferred maintenance. This affects how long it takes to sell a house, and they know this. They’d prefer to work out a way for you to keep the property.
Can I Sell My House Before Foreclosure?
Clients often ask us, “Can I sell my house before foreclosure?” You absolutely can. It’s important to remember that foreclosure is generally divided into two processes: pre-foreclosure and the actual foreclosure.
Pre-foreclosure occurs when your bank has begun the foreclosure process, usually when the homeowner is more than 90 days late on a mortgage payment. Legally, you are still the owner of the property at this point. Your lender is required to notify you in writing that you’ve defaulted on payments.
Foreclosure, of course, means that your lender has taken the property back due to lack of payment. Once the bank has taken back ownership of the property, you’ll no longer be able to sell it, and the only way to stop this process completely is by filing for bankruptcy.
You can sell your home at any point during the pre-foreclosure process. In fact, you are still able to sell your home right up until it’s sold at auction or the bank takes possession of it. Once it is foreclosed, however, you no longer own the home. The bank owns it, so you no longer have a right to sell it. Related in Houston: how to sell a house that floods
How Long Does it Take for a Bank to Foreclose on Your Home?
The actual length of time varies by state, but generally speaking, a homeowner will have between two and three months after being served their Notice of Default before the home is completely foreclosed on. In many cases, the total length of time that it takes a bank to foreclose on your home is 6 to 12 months, depending upon how aggressive they enforce their rights after non-payment. The economic circumstances will dictate how fast they pursue foreclosure. During the 2008 financial recession, banks often delayed this process to avoid a glut of inventory.
Selling a Home in Pre-Foreclosure (Short Sale)
When a homeowner receives their Notice of Default from their lender, they have the opportunity to figure out a way to bring themselves current by paying missed payments and any associated fees. But what if you can’t do that? Selling a home in pre-foreclosure is your next best option.
Your first step should be a call to your original lender. Why? Because even if you do end up selling the home, many people find themselves on the hook for the remaining balance of the debt. Since the home is usually sold for less than what is owed, lenders can, and often will, pursue you legally for the remainder.
So before embarking on a journey to find a buyer and move the property quickly, speak with your lender and make sure that the sale will satisfy your debt in full. They’ll have to agree to forgive the remaining balance on your mortgage, but many are willing to work with you.
Can I Sell My Houston House Fast and Avoid Foreclosure?
You bet. It’s best to try and avoid foreclosure at any costs, as it will do a lot of damage to your credit score, and makes it difficult to get a loan in the future.
Some homeowners will opt for a short sale, but that can sometimes be burdensome and time-consuming. Not to mention the fact that lenders really do not enjoy short sales – it all but guarantees they’ll be losing money on the mortgage. Working with a home-buying company like PPS House Buyers is a better option for unloading your property quickly while receiving a cash payment. Remember, working with us means you can sell your house without a realtor.
Working with a company that buys houses fast in Houston for cash, no matter the condition or financial burden, is key to avoiding a complete foreclosure. It’s a fast option for homeowners to avoid the crushing impact of foreclosure on their credit score – most transactions are completed within a couple of weeks. This will allow you to receive a quick payment and pay off the majority of what is owed before being foreclosed on.
Reach out to us today to see how we can help. Let us know your property address, and we’ll make you a fair cash offer today. We’ve worked with hundreds of homeowners, just like yourself, and we want to help you navigate your way through this confusing process.