Preforeclosure Debt can Ruin your Credit Report. Stop Foreclosure and Save your Credit before it's too Late
Pre foreclosure is the term used to describe action taken by a mortgage lender against a borrower who has defaulted on their mortgage loan. Typically, a preforeclosures notice is sent when the borrower fails to remit their mortgage payment for two or more consecutive months.
In the preforeclosure stage, borrowers still have the opportunity to work with the lending institution to rectify the situation. If they are unable to come to terms with the lender, chances are they will lose their home and all the money they invested in it.
If you are facing foreclosure on your home it's important to take immediate action. The worst thing you can do is avoid contacting the lender and hope it will all go away. The fact of the matter is the lender has every right to reclaim the property if you are unable to make payments.
Should the lender foreclose on your home and sell it at auction, you will be liable for any remaining balance on the loan. This could amount to several thousand dollars, so you want to do everything you can to avoid foreclosure and having your home sold at auction. A foreclosure will remain on your credit report for up to seven years. This can have detrimental effects on obtaining credit of any sort and may prevent you from purchasing another home for many years.
Depending on your circumstances the lender may be able to offer you a Special Forbearance agreement. A Special Forbearance allows borrowers to reduce or suspend mortgage payments for a specified period of time. In order to obtain a Special Forbearance, you must be able to prove you can meet the requirements of the new payment plan.
Another option that may be available to you during the pre-foreclosure stage is known as a Mortgage Modification. This type of agreement provides borrowers with the opportunity to refinance or extend the terms of the loan. Oftentimes, mortgage modifications reduce the mortgage payments to a more affordable level. If you have recovered from the financial problem that caused you to default on your mortgage payments in the first place, a mortgage modification might be able to put you back on track and save your home from foreclosure.
If your loan is at least 4 months delinquent, but no more than 12 months delinquent, your lender may be able to offer you a Partial Claim. When your lender files a partial claim, the U.S. Department of Housing and Urban Development (HUD) will pay your lender the amount necessary to bring your mortgage current. This type of agreement requires you to sign a promissory note and a lien will be placed on your property until the promissory note is paid in full.
If you don't qualify for any of the options above, you might be able to give your house back to the lender through the use of a Deed in Lieu of Foreclosure agreement. In order to qualify for a Deed in Lieu of Foreclosure, you must exhaust all other options including attempting to sell your home. While this arrangement will not save your home from foreclosure, it is not nearly as damaging to your credit report.
Before you make any decision, it's best to consult with a real estate professional such as Simon Volkov. While it may seem there is no hope in saving your home from foreclosure, chances are good Simon Volkov can help you see light at the end of the tunnel.
First we need to gather information about your pre-foreclosure property. To get started, fill out the requested information on our secure Preforeclosure form. Your information will be held in the strictest confidence and there is no obligation to speak with one of our highly trained professionals. Upon receipt of your information we will contact you within 48 hours.
We understand the urgency of your situation and would like to work with you to dissolve the stress associated with the pre foreclosure process. Contact us today to discuss your options with one of our friendly and knowledgeable associates.