California has been severely affected in recent years by a decline in
property values and an increase in foreclosures. Many homeowners bought homes
using financing options such as Adjustable Rate Mortgages (ARMs) that ended up
being detrimental to them. Their payments may have doubled.
proceedings will usually begin after the homeowner is delinquent on their
mortgage payments for approximately 90 days. At this point the mortgage
company will a Notice of Default (NOD) with the court. If the borrower does
not cure this delinquency, the property will be sold at a public auction on a
predetermined date. The Foreclosure
If a loan modification
will not work, there are other options:
• Sell the
house – If there is enough equity in the home to pay off the existing mortgage,
after selling costs, then a quick sale will be the best option. The homeowner
will keep their good credit, and will be in a good position to purchase another
home in the future.
Sale the home
- A short sale is when the bank agrees to take less than what
is owed on the home. With a successful short sale, the homeowner may be
eligible for a new home loan in as little as two years. Many times a bank will
not negotiate a short sale unless the homeowner is delinquent in payments --
being delinquent is what ends up hurting credit scores.
• Deed in lieu
of foreclosure- In this scenario, the homeowner basically gives ownership of the
home to the mortgage company. This option may be a bit better than going through
the foreclosure process.
• File for Bankruptcy – A bankruptcy is
usually considered as a last resort. A bankruptcy can make life difficult in
regards to creditors, assets, pensions, and life insurance
• Allow a foreclosure to proceed is generally considered
the worst choice. This can negatively impact a person’s credit for 7 to 10
years. It can prevent a person from obtaining credit, a mortgage, a car loan,
and in some instances a job.
It is our goal to keep you in your home. For FREE assistance
with a loan modification or to discuss the other options that may be available
to you when facing foreclosure, contact us at your earliest