With the alarming rate at which millions of homes across the country are falling into foreclosure, it has become more crucial than ever before for both prospective buyers and mortgage holders to possess a comprehensive understanding of the entire process. Whether you are a potential buyer seeking to purchase a foreclosed property or a current mortgage holder facing the risk of foreclosure, it is vital to have a solid grasp of the legal procedures involved and the potential consequences that may arise. By staying informed and aware, individuals can make well-informed decisions that may potentially save them from financial distress and secure their future investments.
So what is a pre-foreclosure in Twin Cities anyway?
Numerous homeowners throughout America and the Twin Cities are currently grappling with the daunting challenge of meeting their monthly mortgage payments. In the event that a homeowner misses three to six consecutive months of payments, the lending institution will issue a warning, alerting the homeowner of the imminent risk of losing their home. This period is commonly referred to as “pre-foreclosure.”
Typically, banks and mortgage lenders will provide a three-month window for the homeowner to get up-to-date with their payments. However, this duration may vary depending on the specific bank and situation.
If the homeowner fails to make the necessary payments even after this grace period, the bank will initiate the foreclosure process, taking ownership of the home and evicting the homeowner. However, there are various options available to mortgage holders during this stage of the foreclosure process that can potentially help prevent the loss of their home. It is crucial for homeowners to be aware of these options and take appropriate action to protect their property and financial future.
Pre-foreclosure Options for Borrowers
In the event that you fall behind on your mortgage payments, it is highly probable that you will receive a “notice of default” from your mortgage lender. This official document will indicate that you have not made the required payments for the past 90-180 days. While receiving such a notice may seem overwhelming, it is crucial to remain calm and take appropriate steps to address the situation.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Twin Cities mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Twin Cities like us at Sota Home Buyers, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Twin Cities MN area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Twin Cities area house – We buy houses in Twin Cities and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.