Losing your home is probably one of your biggest fears as a homeowner. But what can you do if your lender starts the pre-foreclosure process against you? Unfortunately, you are not the only one to face this ordeal. For many people, a single event can put them behind on their mortgage payments.
Receiving a notice of default in the mail constitutes the first step of the foreclosure process. Some lenders will send you one as soon as you miss a payment. However, most wait several months before starting the procedure.
The good news is that you still have options to get out of that situation before the lender repossesses your home. In Georgia, the foreclosure procedure typically lasts around 90 days. Here is what to do if your lender starts the pre-foreclosure process.
Pay off your debt
Your best choice is to pay what you owe your lender, including interest and any costs your account has incurred. The lending institution will generally terminate the foreclosure proceedings as soon as your account becomes current. You usually have ten days from the time you receive the notice of default to pay off the debt.
Even once the procedure has started, you can usually manage to stop in before your house goes for sale if you manage to pay off the mortgage in full, including foreclosure expenses and other costs.
Negotiate with your lender
If you are not in a position to pay off the mortgage, your lender may be willing to negotiate a solution with you and prevent foreclosure. After all, it is a costly and time-consuming process that banks and other credit institutions often prefer to avoid whenever possible.
In some circumstances, you may be able to request a loan modification if you are struggling with your mortgage. For example, you may be able to extend the length of the loan to lower your monthly payments. Other options include lowering your interest rate or tacking your missed payments onto the end of your loan.
If you cannot reach an agreement with the bank, another solution consists in offering your deed in lieu of foreclosure. In that case, the bank agrees to take possession of the property and immediately release the borrowers from their mortgage obligations. The advantage for homeowners is that they can walk away from a difficult situation without their credit being majorly affected, which would affect their ability to find new housing.
Selling your house in pre-foreclosure
While your house is still in your name, you can still sell your home – with the lending institution’s input – and avoid foreclosure.
One option is a short sale. If the lender approves, you may be able to sell your home, and the bank agrees to take the proceeds even if it is less than what you still owe on the house. However, sort-sales are subject to the market. Besides, many buyers are wary of short sales, which are notoriously tricky to navigate.
Another solution consists in selling your property, with the lender’s approval, to a company that buys houses directly. It is an excellent way to guarantee a quick closing, and the company may help you negotiate the terms of the sale with your bank.
If you are considering selling your home in pre-foreclosure in Cherokee and Cobb County, including Woodstock, Marietta, Kennesaw, Acworth, Canton, and Roswell, Rocking Porch Homes may be able to help. Contact us today to see if it is the right choice for you.