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Foreclosure

 

Foreclosure is the process of taking possession of a mortgaged property as a result of the mortgagor's failure to keep up mortgage payments.  

 

Foreclosure can leave a black mark on your personal credit for seven years, and it is not uncommon for your score to drop by 100 points.  With a foreclosure on your record, it becomes extremely difficult to obtain a new loan of any kind, even after 7 years, not to mention the permanent negative impact on your credibility.  Landlords will be very hesitant and IF they decide to let you rent, and may require hire rent to protect their interest.  It is important to avoid foreclosure at all costs.

 

 

HOW TO PREVENT FORECLOSURE

1. Be Proactive - Get in touch with your lender to review your options.

 

2. Get Help - Click on the resources below for more information:

 

US Department of Housing and Urban Development (HUD)

 

National Foundation for Credit Counseling

 

3. Negotiate a Short Sale - The lender may allow you to sell the house for less than what you owe.  Your credit is still negatively impacted, but it is not as severe as a foreclosure.

 

4. Sell Your House Quickly - If you have equity in the home, it is often better to sell your house for a discount and preserve your credit and credibility.  Even if you don't have much equity, you can sell your house by letting someone else take care of your payments.  This process is fast, and can take as little as one week!  If you think this is the best option, we would like to help.  Click here to get a no strings attached offer on your house.

 

 

Learn more on the following topics to understand your options:

 

Foreclosure     *      Short Sale     *     Tax Liens

 

FREE E-BOOKS

 
 

Short Sale

 

A short sale may be refered to as a pre-foreclosure.  It is when you sell your house for less than the balance remaining on your mortgage.  To do a short sale, it must be agreed upon by your lender.  Short sales are slightly less severe on your credit and may remain on your record for as little as 3 years instead of 7.  Banks take less of a loss on a short sale than a foreclosure, and you avoid involvement with the bank's attorney.

 

 

HOW TO INITIATE A SHORT SALE

1. Gather financial data - You will need your mortgage statements, debt payments, and income details.

 

2. Explain your situation - Outline your current hardship to your lender and explain why you are having trouble making your payments.  Your mortgage company will need to understand the reasons why you are having difficulty.

 

3. Contact a Realtor - Realtors that specialize in short sales may help you facilitate your house sale with the bank.  Keep in mind short sales may take up to 120 days to go through.

 

There are more helpful resources on the Fannie Mae website:

http://www.knowyouroptions.com

 

 

Tax Liens

 

A tax lien is a lien imposed by law on a property to secure the payment of taxes.  A tax lien may be imposed for delinquent or failure to pay of property taxes.  With a tax lien, the governmen't right is protected to claim your property if you don't pay your tax obligations.  A tax lien is considered public record, which means everyone, including the credit bureaus, can see the lien.  Once a lien has found its way into your credit reports, it is not easily removed.  

 

 

HOW TO ADDRESS A TAX LIEN

1. Settle it - If you can't afford to pay off the full amount, you may make an offer to the IRS proving that you are in financial hardship.  If they choose to accept it, they will file a release of your lien.  This doesn't mean it is removed from your credit report, it just shows as a "released" lien which will remain on your credit report for 7 years before it gets deleted.

 

2. Pay it - If you don't have any sort of financial hardship, pay the lien in full to the IRS.  The credit reporting scenario above still applies.

 

3. Request a Withdrawal- If you pay your lien in full, or enter into an installment program, you can petition to the IRS to withdraw your lien, rather than release it.  Use IRS form 12277 to apply for withdrawal.  If you are successful getting it withdrawn from the IRS, calling the credit bureaus will then remove the lien from your record.

 

If you are in financial hardship and need to sell your house, we can buy your house and may be able to pay off your lien so that there is no negative impact on your credit score.  We may even be able to provide you a loan to pay off your debts secured by your house.  Please contact us if you would like to discuss your situation.

 

 

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