Be Proactive: Sell Before You Confront Pre-Foreclosure
What is Pre-Foreclosure and how does it work in Dallas Fort Worth?
One of the most dreaded situations you, as a borrower paying a mortgage, can face is when you can’t afford to make the current month’s payment. If you don’t pay the mortgage within 30-days of its due date, you are now facing pre-foreclosure action. A homeowner confronts pre-foreclosure action from the bank when he or she is behind on the mortgage payments due to some sort of financial distress (loss of job, death of a spouse, etc.). Pre-foreclosure is the beginning communication and remediation process to allow you to work with the bank to get caught up on missed payments or to work out a loan modification. At this point, even if you can’t get caught up on missed payments or the terms of a loan modification won’t work for you, be proactive and communicate with the lender in the spirit of partnership. In this pre-foreclosure stage you, as the borrower, are still the owner of the property and it’s a great opportunity to negotiate with your lender. Most lenders do not want to carry out a foreclosure and prefer to negotiate with the borrower to try to get the borrower back to making payments on the house, even if they are paid after the date that they would have preferred.
So, what happens if you can’t get caught up within 30-60 days and loan modification isn’t an option? You are confronting foreclosure. Before you get that far, there is another interim step which should be considered second. SELL YOUR HOUSE! This is super important because this way you capture every cent of equity you’ve built up over your years of ownership. You need to hire an experienced real estate agent who can help you sell the house before the foreclosure is carried out. While the real estate agent won’t have as much time as she would during a normal sale, she would try to get more out of the sale of the property with what time she has left, rather than just trying to sell it yourself without any professional advice and losing precious time and money in the process
Contact us and we would be happy to advise you on all of the necessary steps to get you to the closing table before foreclosure. We will intervene on your behalf and start to communicate with your lender right away. This is especially relevant in today’s market in Dallas Fort Worth where home prices are rising with the slowdown in inventory and buyer demand is still stable to strong in most areas.
If you don’t sell and the property goes to foreclosure you will lose all of the money that you have ever paid toward the principal on the house, and will be left with nothing, but memories. Something is always better than nothing. If you are not in a short sale situation, selling your home should be your first and primary option to protect and walk away with equity (aka CASH).
Foreclosure is always an absolute last resort. For whatever reason, perhaps the bank is being really aggressive about their foreclosure timeline, and let’s say you cannot sell the house in the time needed, there is a third area of remediation. You can offer to forfeit the property and hand it back over to the bank. This process is called a deed in lieu of foreclosure. This must be negotiated and approved directly with the loss mitigation department of your lender but is a good option before you get to foreclosure assuming, they would allow it. We highly recommend this step at least as another layer of negotiation with your lender before foreclosure.
So, be proactive. If you are facing financial stress and are getting behind on your mortgage payments, call your lender. Negotiate with them, try to come up with strategies that can help you keep your house. If, on the other hand, it is too big a debt for you to handle at the moment, or you have any missed payments call our team of qualified and experienced real estate agents for advice. Do not just sit and wait for the payments to pile up and for the foreclosure notices to arrive. Don’t become 30, 60 or 90 days late and avoid any additional tax liens due to non-payment. There are some steps that you can take before that. We can help. Call us today as your pre-foreclosure specialist to talk about your specific situation.
