Missed paying your mortgage payments?
Moving towards a foreclosure can be stressful, bringing uncertainty with it. During a foreclosure struggling homeowners are pushed in a corner by the large debt and the officials.
You are often told that there is no way out of this hell hole, but is this the whole truth?
Do you have to leave your home?
No! You have options when it comes to mortgage foreclosure.
Understanding the options about what you can do in such a situation will help you manage your credit score and also keep you away from the stress of legal actions.
THE FORECLOSURE PROCEDURE
Foreclosure is when you cannot pay off the debt that you legally owe to a lending organization for several reasons. In such a scenario, the lender has the legal right to sell your house to recover the debt you owe.
But what happens when the property goes into foreclosure. Different states can have different laws, but generally, they have the following steps.
- The lender will send a payment default notice to remind the defaulting homeowner that they are lagging on the payment.
- The homeowner is given some time to pay off the money and several other charges like attorney charges, penalties etc.
- But if the given period passes and the homeowner cannot pay off the money, that’s when the notice of foreclosure sale is sent.
IMPACT OF FORECLOSURE
The whole process of foreclosure can be stressful, time consuming and have severe, long-lasting effects such as:
● Negatively affect your credit score and credit history, which harms the possibility for you getting a new house, credit cards and sometimes even employment.
● Uncertainty of when you might have to leave your home.
● Badly affects your mental health.
● Even after foreclosure, you might owe a deficient balance.
● You lose out on low-cost lending opportunities.
● Bad financial condition, economic hardship and housing instability.
The foreclosing rate is at an all-time high due to the ongoing pandemic where people have lost their livelihood and are struggling to meet their daily needs.
According to a recent survey, an Eviction Tsunami is coming. About 38,000 residents of Fairfield County, Connecticut, will likely lose their homes in the upcoming months.
The number of failing mortgages in Bridgeport is 5.1%, which is way higher than the national value of 1.1%. The homeowner percentage who are lagging in their debt payment stands as high as 26.9%.
Connecticut foreclosure rate is the 13th highest in the United States. A recent report by Berkshire Hathaway Homeservices states that the sales of single-family homes grew by 15.48%.
DON’T PANIC – THERE ARE WAYS OUT!
There are ways in which you can avoid your home foreclosure;
- Ask your lender for a loan modification
This way, you can increase your length of time for debt repayment.
- You can ask for a short sale
A short sale is when you sell your house to a third party for less than you owe. The difference is waived off in some states, while you might have to pay the rest in some states.
- You can ask the lender to let you spread out the missed payments over several months.
- File for bankruptcy – You may consider this option as the last arrow in your quiver. It will negatively impact your credit history if you file for bankruptcy and prevent the lenders from continuing any repayment collection.
- Sign a deed in lieu
This deed lets you transfer the house in the lender’s name in case of foreclosure. In return, the lender waives off the mortgage and cancels the foreclosure action.
REACH OUT FOR HELP
With a high level of stress, the paperwork involved, emotional damage and time uncertainty with foreclosing, people tend to lose their cool and want to sell their house eagerly.
We at CT Keys aim to help people during these tough times by providing a sale-for-cash facility.
Homeowners facing foreclosure can sell their house as-is for the best cash offer and possibly avoid foreclosure.