All About Foreclosures: What You Need to Know

Foreclosure can be a scary and stressful situation, but knowledge is power. This blog will break down everything you need to know about foreclosures, from what it is to how to avoid it.

What is Foreclosure?

Foreclosure is a legal process that allows a lender, typically a bank or mortgage company, to take possession of a property when the borrower fails to make their mortgage payments. The lender can then sell the property to recoup the money owed on the loan.

The Foreclosure Process

The foreclosure process varies by state, but there are generally six common phases:

1. Default: This occurs when the borrower misses a certain number of mortgage payments (usually 3-4).
2. Notice of Default: The lender sends the borrower a legal notice that they are in default and foreclosure is possible.
3. Foreclosure Sale: The lender schedules a public auction to sell the property.
4. Redemption Period: In some states, the borrower has a set amount of time (usually a few months) to buy back the property by paying the full amount owed on the loan, plus interest and fees.
5. Eviction: If the property is not redeemed during the redemption period, the borrower will be evicted.
6. Deficiency Judgment: If the foreclosure sale doesn't cover the entire loan amount, the lender may seek a deficiency judgment from the borrower for the remaining balance.

What Can You Do to Avoid Foreclosure?

If you are facing foreclosure, there are steps you can take to avoid losing your home:

• Contact your lender as soon as possible. Lenders often have programs to help borrowers who are struggling to make their payments.
• Work with a housing counselor. A housing counselor can provide you with free or low-cost advice and guidance on your options.
• Consider a loan modification. This can involve lowering your interest rate, extending the term of your loan, or both.
• Contact Real Estate Guy to Sell.  We will help you decide on a plan of action.  It might be a way to refinance, or delay payments, or it might be best to sell and get what ever equity into your pocket and not into the bank or an investor.   If there is no equity, we might be able to conduct a short sale which is to sell and to negotiate with the bank on any excess debt.  In doing so helping save your credit.   Contact Real Estate Guy. 608 513 1123

Resources for Help

If you are facing foreclosure, there are many resources available to help you. Here are a few:

• The National Foundation for Credit Counseling (https://www.nfcc.org/)
• The Department of Housing and Urban Development (https://www.hud.gov/)
• Your state's housing finance agency

Remember, you are not alone. There is help available to avoid foreclosure and keep your home. A great place to start with advice is Real Estate Guy,   Guy@RealEstateGuy.net, or Call Guy at 608-513-1123 to discuss your plans.