How do I stop foreclosure on my home?

How do I stop foreclosure on my home?


Foreclosure: What it is and how to stop it!

If you have received notice that your home is being foreclosed upon it can be a frightening and nerve-racking time. I wanted to write this short article to help someone going through foreclosure understand their options, possible outcomes and to reassure those undergoing this process that there is a light at the end of the tunnel.

One thing to note that there are many different options to delay or stop foreclosure. Weighing out which one is right for you depends on your credit, current financial situation, and stability of your income. The first step in foreclosure is to stay calm.

The Foreclosure Process:

  1. The process has 2 forms, judicial and non-judicial, depending on the state you are in. Here in Portland, OR, we have both systems. Non-judicial is the more common and happens without the court being involved. The lender decides that after delinquent payment on a loan, it is time to put the home into foreclosure.
  1. The first thing they will do is send a notice of default to the borrower. This may include a notice of sale; the notice of sale must be provided 120 days before the sale date along with a “danger” notice. The danger notice warns of the impending foreclosure, notice of the sale will be published in the paper for 4 weeks before the sale.
  1. The loan can be reinstated anywhere up to 5 days before the sale.
  1. If not reinstated the house will be sold at an auction to recuperate the losses of the lender.
  1. Redemption rights are available depending on the state and type of foreclosure. In a non-judicious foreclosure, there are no redemption rights whatsoever. In a judicial foreclosure and depending on the state, there is a 30-60 or 90-day window where the borrower can buy back the property for the price it was auctioned for.

Now with a baseline of knowledge around the process lets discuss ways to prevent or delay foreclosure.

How to Prevent or Delay Foreclosure:

  1. Loan workout, this is when you talk to the lenders and work out a way to pay the mortgage. Remember the lender WANTS to work with you in most cases. For them it is extra work to list a property and sell it, not to mention most financial institutes still want to help keep people in their homes as much as they can.
  2. Short sale, ANY TIME BEFORE THE AUCTION you can sell your own house. This may mean selling it under market value to close quickly. Doing this you still need to pay back the remainder of your loan but retain the rest of what you made from the sale. To close your house quickly for all cash, check out the rest of our website and give Dynamic Real Estate a call at 503-376-6060. Otherwise, you must list it aggressively and market consistently within the time frame before the auction.
  3. File for bankruptcy, this option will hinder your credit and should be discussed with a lawyer first. DISCLAIMER: I am not a lawyer and would never claim to have their knowledge. I highly recommend consulting legal advice if you are going through foreclosure. There are 2 types of bankruptcy chapter 7 and chapter 13. Chapter 7 discharges unsecured debt and chapter 13 you structure repayment plans and repay creditors.

These are the 3 main options, there is 2 other Deed in Lieu of foreclosure and Lease-Options. The main key is to stay in touch with the lender, a lawyer if you have one, and any realtors if you know them.

If you are being foreclosed upon it is important to know your option and act quickly!

Ben Kilfoil,

Dynamic Real Estate Innovations,

Portland, OR

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