Have you missed three or more mortgage payments? If so, you might think the loss of your home to foreclosure is inevitable however, it’s not, yet.
Many homeowners mistakenly believe that once their home is in default, there is no other option except foreclosure. Not true. In fact, you have several options prior to your home being sold at foreclosure auction.
A foreclosure begins with a Notice of Default (NOD) filed by your mortgage lender typically after three months of missed mortgage payments. The Notice of Default marks the start of the foreclosure process.
Usually after four to six missed mortgage payments the lenders’ attorney will file a Lis Pendens (Lawsuit Pending) in which you will be served legal papers by a process server or the sheriff’s department.
In Florida, the average foreclosure process takes between six to eight months. However, there are several stages during which the homeowner has an opportunity to avoid losing their home to foreclosure.
Can I Sell My Home Before Foreclosure?
You have the right to sell your home up until the foreclosure sale. This may be the best way for you to get any equity you may have in your home. You should consider selling your home the quick and easy way through a Real Estate Investor, or through a Short Sale with a realtor, an often long and drawn out process.
Can I Sell My Home During Foreclosure?
Up until your home is sold at a foreclosure auction or the bank takes possession you can sell your home to a Real Estate Investor, or Short Sale and possibly net enough to pay off everything you owe the mortgage lender, including back payments, penalties, and fees.
What Happens If You Stop Paying Your 2nd Mortgage?
If your second mortgage is secured, and you stop paying your loan payments, the holder of the second mortgage can foreclose on your home in order to recover all or part of the money it loaned to you.
Can You Stop A Foreclosure Once It Starts?
While foreclosure is the worst case scenario, you have several options for postponing or stopping the foreclosure process.
For example, your mortgage lender may give you, an additional 90 days to settle past due payments and reinstate the loan. This is known as the reinstatement period.
During that time, you can stop foreclosure proceedings by making your loan current, and paying fees that you have incurred including all legal and court filing fees and any late charges.
Keep in mind, if you are unable to bring your mortgage loan current during the reinstatement period you do have other options to avoid losing your home.
- Sell Your Home To A Real Estate Investor
If you are facing foreclosure and can no longer afford your mortgage payments, you should consider the option of selling your home to an REI, a Real Estate Investor. Why sell your home to an investor?
Selling your home to a Real Estate Investor has many advantages. First and foremost it saves time and a lot of stress and headaches, unlike a short sale.
Secondly, selling your home to an investor means your home will be paid for in cash and can close in as little as two weeks, which is a major advantage if you need to sell your home quickly.
Lastly, no repairs are needed. You can sell your home as is because the sale of your home to a Real Estate Investor doesn’t rely on an appraisal, property inspections or mortgage approval.
- Short Sale
A short sale is the sale of your home for which the mortgage lender is willing to accept less than the amount still owed on the mortgage.
However, a short sale on your home cannot happen unless your mortgage lender approves it. Because everything is dependent on your mortgage lender, the short sale process can be rather long and unpredictable.
Filing bankruptcy will stop a foreclosure however, keep in mind a bankruptcy simply just buys you more time. Before you consider bankruptcy as an option it is best to consult with a bankruptcy attorney so that he or she can advise you whether or not filing for bankruptcy is a good strategy for your situation.
- Deed in Lieu of Foreclosure
A deed in lieu of foreclosure (DIL) is when the homeowner, signs the deed to your home over to the bank / mortgage company voluntarily and therefore relinquishing your rights to the property, in exchange for a release from the mortgage.
The advantage of A Deed in Lieu of Foreclosure allows your lender to obtain ownership of the property without the cost and time delays associated with a judicial foreclosure where the process is lengthy and costly, such as in Florida.
- 5. Special Forbearance
Sometimes, a short-term financial hiccup like a medical emergency may keep you from making your mortgage payments on time. If your mortgage lender believes you have a valid reason for missing payments they may agree to a special forbearance in which you will temporarily owe lower payments; you may also be eligible for an interim suspension of payments.
- 6. Mortgage Modification
A process where the original terms of your mortgage are modified by a new agreement. This often means lowering your interest rate, monthly payment, and spreading any past-due amounts owed out over time.
However, to qualify for a mortgage modification, you need to be able to prove to your mortgage lender that your money issues are/were only temporary in nature.
Saving Your Home From Foreclosure
A foreclosure can often be avoided even if you’ve already received a foreclosure notice. It’s important to know your rights as well as understand all the various options available to help you during the foreclosure process.
If you are unable to obtain a loan modification or special forebearance, you have other options other then foreclosure including a Deed In Lieu, Short Sale, or selling your home to a Real Estate Investor (REI).
Where to Find Florida’s Foreclosure Laws
You can find the Florida Statutes on the Florida Legislature’s website at www.leg.state.fl.us/statutes.
The citations to Florida’s foreclosure statutes are:
- Florida Statutes Sections 702.01 through 702.11, and
- Florida Statutes Sections 45.031 through 45.0315.
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