Every homeowner needs to know the Foreclosure process in their state. In Florida the foreclosure process is Judicial. In other states such as Georgia, the process is Non-Judicial. To make the difference between the judicial foreclosure process and the Non-judicial one easy to understand. In the judicial process, the lender needs to file a lawsuit in court to get a judgment to foreclose on the property. And the Non-judicial foreclosure process the lender can foreclose without going to court, which can be faster and less expensive than judicial foreclosures.
Pre-foreclosure is the first step in the foreclosure when the lender has given a notice of default to the borrower. During this time, the homeowner has an opportunity to work with the lender to either keep the home or negotiate different terms available according to the bank and type of loan.
STEP 1 – DO NOT IGNORE THE BANK LETTERS!
You have the Pre-Foreclosure stage which has a duration of about three (3) months to talk to your lender and explain your situation and understand your solutions. Do not abandon your property. Very importantly, do not be embarrassed or ashamed of your current situation. Be honest with yourself and your family about the possible resolutions the bank or lender can give you such as: 1. Forbearance: the lender can give you time to delay payments or reduce the amount of payments made on a loan for a short period. 2. Note Modification: The lender might consider making changes to the conditions of the loan like extending the length of the loan. 3. Short Sale: If your home in its current condition is worth less than what you owe to the bank, the lender could accept less than the amount owed. 4. Partial Claim: if you have an FHA loan, your lender may be able to work with you to obtain payment from the FHA insurance fund to bring your mortgage current. 5. Deed-in-lieu-of foreclosure: As a last resort, you can voluntarily give back your property to the bank.
STEP 2 – CONTACT (HUD) THE DEPARTMENT OF HOUSING
You need to find a HUD-approved housing counseling agency near you with a simple Google search. These agencies are valuable resources and can offer information about government programs, and community organizations that could help you. These services are free of charge. Call 1-800-569-4287 or TDD 1-800-877-8339
STEP 3 – BEWARE OF SCAMS
Unfortunately, many companies attempt to prey on those who are in danger of losing their home. While not all companies are disreputable, many are. Let’s look at the most common scams out there: 1. Phony Counseling agencies: Some groups may approach to perform certain services for a fee, and are the same services you could do yourself for free or with a HUD-approved housing counseling.
2. Equity Stripping: In this scam, a mortgage lender is well aware of your challenging financial situation and pushes you to get a larger mortgage to pay off the original mortgage. This larger mortgage has even larger monthly payments than the original mortgage.
3. Lender Scams. Small banks may offer to refinance your home with an interest-only payment plan. This can be great, for a while. Your payments will be much lower at first. Eventually, however, there is likely to be a large balloon payment due.** Many people won’t be able to make the balloon payment or be able to get another refinance to stop the new foreclosure. While this is not technically a scam, it usually turns a bad situation much worse.
4. Equity Skimming: In this instance, a buyer will convince you to sign your property over to him in exchange for making your payments. The buyer will then rent out your property and start collecting rent. The buyer will not make your payments as promised and the lender will foreclose.** If you have a significant amount of equity, the buyer will flip the property to another buyer at a higher price and keep all the profits. Instead of falling for this, if you’re in danger of losing your home to foreclosure, sell it yourself and profit from your equity.
5. Phony Loan Transactions: An unscrupulous lender refinances your loan and provides documentation that gives the appearance of bringing your loan current. Sometimes, these documents actually transfer your home’s title to the company for a very small payment.
YOU NEED TO ACT FAST! delaying can’t help. if you do nothing, YOU WILL LOSE your home and your credit. Many unscrupulous people are aware that you might be desperate and agree to anything that looks like a lifeline. They can discover your situation from public records. Be aware of the common scams that are out there and look out for your best interests.
Disclaimer:
While Investahaus offers real estate investment solutions, this guide is for informational purposes only and should not be considered legal or financial advice. Always consult with qualified professionals: lawyers for legal matters, financial advisors for financial guidance, and realtors for selling or buying a home.
By following these steps and utilizing the resources provided, you can navigate foreclosure with knowledge and confidence. Remember, you are not alone. Investahaus was created to offer real solutions with total transparency. Contact Us Today!