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What is it?
In simple terms, it is the involuntary repossession of property through either judicial or non-judicial means by the lien-holders.
- Your property is controlled by the lender in foreclosure, whereas in a short sale, you remain in the future marketing and negotiation process and your lender only approves/ disapproves the offer price.
- You can select your real estate agent instead of having one assigned who may / may not be familiar with your area and specific neighborhood.
This process can begin at any time following a missed payment, at the lender’s discretion. The process will vary state to state and anyone facing the possibility of foreclosure, should seek immediate help from qualified sources such as:
HUD - Dept of Housing Urban Development
An experienced attorney
A Tax advisor
We recommend that you consult with all of these before making a decision that will affect your financial future. The worst thing to do is to walk away from your property.
There is assistance out there in order for you to avoid foreclosure and you should explore all options available to you as early as possible. Once you have missed a payment or feel as if you will have financial difficulties that will prevent you from making payments, you should begin to lay the groundwork for an alternative solution.
The first document usually recorded when a borrower is behind on payments, is called a NOTICE OF DEFAULT, in which the lender/s notify you of the impending filing via certified mail. Generally you will have a specified amount of time in which you must bring the account current on payments, usually 90 days. If you fail to bring the account current within this timeframe, the lender/s can continue with the foreclosure proceedings. The lenders or their designated representatives will have the right to inspect the property at their discretion throughout this proceeding to verify occupancy status, condition or both.
The next phase is likely to involve a specified date of sale for your property known as TRUSTEE SALE in which you will receive notice. Many know this as the “Sale on the Courthouse Steps”, however, often properties are sold back to the lending institutions, who then market the property for sale with a local real estate professional. The property will then become “Bank-Owned” and referred to as an REO (Real Estate Owned).
Once you lose your property to foreclosure, you are not automatically relieved of the indebtedness and should fully understand the potential liability (Deficiency Judgement) that may exist by speaking to your chosen attorney and tax advisor for a more detailed explanation.
Alternatives to Foreclosure:
What about my Credit?
There is little doubt that your credit rating will be damaged once you become delinquent on your loan payments, however, you can lessen the severity of the impact by facilitating a Short sale or Deed in Lieu as opposed to a foreclosure. The most severe damage will occur through foreclosure and you should make every attempt possible to avoid it.
Schedule a Short Sale Analysis Appointment
Upon consultation with your attorney and tax advisor, we can help you assess your specific situation and provide you with updated information about your property location, market conditions and a general probability analysis if you elect to sell short.
We will:
Evaluate your property and provide a “Broker Price Opinion” based on comparable sales in the past 6 months.
Provide general information on the expectations when you sell short.
Provide you with a comprehensive Marketing Plan for your property that coincides with market valuation and current market conditions, along with lender / investor requirements.
Market your property using the tools available for providing maximum exposure on the internet and in print so that your information has global presence as well as local.
Work with your lender during the marketing process to ensure all guidelines are met and communication remains open and effective. The objective is to sell your property for as much as possible so that your lenders can recover as much as possible.
Help you complete the required Real Estate documents and assist during the escrow process.
Provide you with a full set of Real Estate Transaction Documents for you to keep and refer to later if needed.
Information contained on this page and site are intended as reference only and not to be deemed as legal or tax advice. The data is general in nature and for general purposes designed to inform on a basic level. You are advised to seek the advice of an experienced legal and / or tax professional for such information.
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