When you’re facing foreclosure, your options may seem limited. But there are ways to get out of foreclosure and avoid losing your home.
Submit what’s known as a “deed in lieu of foreclosure.
One option is to submit what’s known as a “deed in lieu of foreclosure.” This means that you voluntarily give up ownership of the home (by signing over the deed) instead of going through the sometimes lengthy process of a formal foreclosure. A deed in lieu can be a good way for homeowners who want to find some sort of solution quickly to keep their credit from being damaged further by having a foreclosure on their record.
Most lenders will only accept deeds in lieu if they believe that the borrower has no chance of paying back the mortgage they owe – in other words, they’ll be willing to do a deed in lieu only if they expect the property will sell for less than what is owed on it. Homeowners who are facing foreclosure may want to consider this option as one of their possible solutions after seeking financial counseling and exploring all other possibilities.
Homeowners who choose deeds in lieu of foreclosure should keep in mind that although this solution can help them avoid a foreclosure credit report entry, they will likely still encounter credit problems since most lenders require borrowers to pay off any remaining mortgage loan balance at closing (usually by wire transfer or cashier’s check). In addition, homeowners need to make sure that there are no liens against their home – for example, unpaid property taxes or unpaid contractors’ bills. Any outstanding liens will have to be paid off totally before a lender will agree to take back the property.
Another option for homeowners facing foreclosure is a short sale, which occurs when the homeowner sells their home for less than what they owe on it and the lender agrees to accept that amount as payment in full. A short sale is viewed by lenders more favorably than either a deed in lieu of foreclosure or a foreclosure, since it can help homeowners avoid having their credit records tarnished by these actions. However, the seller must usually submit financial documents proving they can’t make payments on their current mortgage (along with other information required by lenders), so this solution has its own set of requirements.
The first step to getting out of a foreclosure is to put together an action plan. Once you do, it’s important that you act quickly. Calling up your lender and asking for help with your situation may be a good place to start.
If you would like to talk more about avoiding Foreclosure contact us at Houses 4 Texas LLC. We are confident you will have a great experience and we will help lead you in the right direction. If you would like to sell your home quickly for cash we can assist you with that as well. Call 210-610-0912 or click here to visit our website to get a little bit more info.