Foreclosure can seem intimidating but rest assured there are options. The sooner that you address the matter the more options you will have. The first step that occurs when there are problems with lack of payments to your creditor is a default. Another words, the borrower is not current with their payments on their mortgage to the bank. Therefore, the property goes into default. There is usually time to make arrangements with the lender until it goes into foreclosure.
There are a couple of different paths that can be taken before foreclosure. So the sooner you contact a broker to advise and help you understand your rights the more likely it is not to have the severest consequences on your record.
At the point of foreclosure, if you have yet to handle any aspect, we suggest that you seek an attorney. If you are at the beginning or middle of the process, please call North Lake Tahoe real estate. We have helped many homeowners. Please call us if you need assistance. Century 21 Lake Tahoe can take away a lot of fear, frustration and confusion.
A shortsale is when the owner has too much debt through property liens. Another words, they owe financial institutions(s) more than they can afford to repay. This is called a deficiency. Since the lender is owed money they consider a shortsale to recoup what they can. The lender and brokers can negotiate a settlement. A shortsale is beneficial for many reasons.
One of the main advantages of a shortsale has to do with your Credit Rating. A shortsale only affects your credit for 3-4 years, where as a Deed in Lieu of foreclosure and a foreclosure will appear and affect your ratings for at least 7 years.
Deed in Lieu of Forclosure
A “Deed in Lieu” is another option once you are in default. In this arrangement, the homeowner agrees to sign their mortgage to the lender. There are advantages to both the homeowner and the lender(s) to arranging a Deed in Lieu. There is basic documentation that needs to be completed and accepted by the financial institution. Deed in Lieu is the best option when you have only 1 loan.
When a homeowner fails to pay their mortgage, a foreclosure occurs. In a foreclosure the first thing that will happen is the owner will get a “Notice of Default”. There is only 90 days to respond to the default so it is imperative to address it as soon as possible since negotiations can take time. After 90 days a “Notice of Sale” is delivered and the home can be sold within 21 days. If there is no negotiation, a “Notice of Trustee Sale” creates a date for Auction.
Once it goes to auction 4 things can happen:
1-It can be postponed
2-It can be cancelled
3-It can be sold to the bank
4-It can be sold to a 3rd party.
Both #3 and 4 supply money back to the financial institution(s) that are owed.
There are several different types of auctions. The two main foreclosures are by judicial sale and foreclosure by power of sale. The Judicial sale involves the sale of the property that is court supervised, and the proceeds, respectfully, then satisfy the mortgage, any other liens and if there is money left it goes to the mortgagor. In the power of sale the court is not involved and the holder of the mortgage sells the property.
There are ways to delay or simply avoid foreclosure. Situations exist that the creditor might take the ownership of the property back- this is a negotiation and the “fair market value” must be agreed by both parties. There are also circumstances for business/commercial with Chapter 11 and Chapter 7. Declaring bankruptcy has the benefit of time. Obviously there are other possibilities to stop a foreclosure.
Hence, the importance of contacting an experienced broker such as Century 21 Lake Tahoe. is beneficial. Time is of the essence to help protect you and your family.
Kelly Smith has been handling and negotiating foreclosure properties with a tremendous accomplished record for over 20 years. Kelly Smith specializes in the Tahoe basin, including but not limited to the North and South Lake Tahoe areas.
North Lake Tahoe real estate is unique simply because of the area. To be able to work with someone that knows the business and the area might just save your home and livelihood.