How to stop a foreclosure on a home?
Monday, March 8th, 2010 at
11:30 pm
We are 3 months behind on our house payments because my husband recently lost his job. We got a letter in the mail yesterday and have 30 days to come up with the money. If we can’t our home will be foreclosed. If we can’t come up with the money what should we do? I have tried to get a modification loan and the guy to me we didn’t qualify. What are other steps we should take? We live in Kansas if that helps.
Tagged with: Foreclosure • home • Stop
Filed under: Foreclosure
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Call a real estate agent TODAY and put the house on the market. IF you get an offer, then take that offer to the bank. If the house will sell for enough to pay off the mortgage, then do it. If the house won’t sell for enough to pay off the mortgage, then offer the amount to the bank as a short sale. If they take it, then great, you’ve avoided foreclosure, if they don’t then at least you can say you made every reasonable attempt to do the right thing.
Loan modification would only be an option if/when you have another job. One of the first criteria of loan modification is that you must be able to afford the new payment. It doesn’t do the bank any good to go through the expense of modifying a loan, if you’re just going to get behind on payments again. The only reason a bank would be willing to modify a loan is if they think it would help you avoid foreclosure AND they think that is the option that is best for their bottom line.
Call your mortgage lender, they are able to work with you on a different payment plan to avoid the foreclosure, you may have to pay more each month till your caught up but it’s worth it, that is if you can afford it. But before you call make sure you have all your bills ( the amounts of each) the exact amount of money y’all make, they will ask for all of that to see what type of payment plan the can work out with you.
First, you need to know what the foreclosure laws are in Kansas. That letter may tell you the date of the sheriff sale. You need to know how long after that date you have to stay in the property. You could try getting it sold quickly, but would need approvals from lender on a short sale. Unfortunately you don’t have many options. You could try paying 1/2 now and 1/2 within 30 days. The problem is these lender typically place huge fee’s on top of what is actually owed. Making it really difficult to pay up.
Once last hope is call 888-995-HOPE, they may be able to provide you with some guidance. Best of luck and hugs from Minnesota Realtor.
If you want to continue living in your house, you need to call your lender again and tell them you need to be considered for a loan modification. If one person says you can’t, then call back and talk to someone else – be persistent! Depending on who your lender is, the number you call is transferred to different parts of the country and the “clerks” that answer the phones may have a different answer. Also, they aren’t always updated or even educated on their loan modification programs, so be persistent.
Being unemployed doesn’t necessarily disqualify you from being approved for a loan mod but having a job definitely helps. You have a legitimate hardship and the lender is supposed to assist you. Did your husband receive a severance package? Or is he receiving unemployment benefits? You’ll need to prove to the lender that he’s trying to get a job for them to consider the loan mod. They want to make sure that, if they modify your loan, you’ll be able to afford the new, lower payment. Don’t settle for a forbearance plan, whereas they’ll let you make catch up payments. Your monthly payment will be higher. That defeats the purpose of what you are trying to do and may even put you into a worse financial situation.
Once the lender has all of the required documentation and information from you (i.e. pay stubs, bank statements, income and expenses, etc.), your file will go into review and the foreclosure process will be postponed, but not stopped, pending their decision of your loan mod. Be sure to follow up weekly with them once you submit everything. Keep on top of things, because if something slips through the cracks, the foreclosure process will continue, sometimes without you even knowing.
If you don’t want to live there anymore, then you need to put your house on the market or short sale it if you owe more than what your house is worth. Enlist the services of a Realtor and they’ll be able to help you with the short sale. Don’t just walk away from the house as this will have a more adverse affect on your credit as opposed to a short sale. A foreclosure will drop your FICO scores about 200 to 300 points whereas a short sale will drop it by 50 to 150 points.