“I’m behind in payments…will I be giving my house back to the bank in the Bay Area?”
Losing one’s home is a dreadful situation. However, when financial circumstances become overwhelming, it can be challenging to manage one’s monetary commitments.
If your situation worsens, you may find yourself in the unfortunate circumstance of having to return your house to the bank in the Bay Area California, resulting in a temporary lack of housing. Moreover, this can have long-term implications, including a significant and enduring effect on your credit score (and your ability to obtain a home in the future).
No one wants that. That’s not an ideal outcome. Fortunately, there is a strategy you can take today to help you proactively protect yourself and get back on track to financial solvency.
Here’s a brief overview of the foreclosure process
The foreclosure process can vary depending on location and the type of mortgage you have.
In case you fall behind on mortgage payments, your loan company will generally send you notifications and warnings. If you continue to miss payments, your loan company may eventually put your home up for public auction as a means of recovering the debt.
The length of time you are allowed to stay in your house after it has been sold at auction varies depending on the state you reside in. Nonetheless, it is inevitable that you will eventually have to seek a new place to live.
Fortunately, you have options!
If you wait until your home is foreclosed, it can have a devastating effect on your credit rating. This can lead to difficulty in obtaining loans or credit in the future, and can even affect future employment opportunities. To avoid this, one option is to work out an arrangement with the loan company called a “deed in lieu of foreclosure”.
In this situation, you transfer the ownership of the house to the loan company to save them the cost of foreclosure proceedings, which can be substantial. Additionally, if you take this route, you may be able to negotiate more favorable terms, such as a reduction in the amount owed or a waiver of deficiency judgment. Furthermore, if you act quickly and proactively, you may be able to avoid the negative impact on your credit report that a foreclosure could cause. Instead, by working with the loan company to come up with a mutually beneficial solution, you can show responsibility and a willingness to address the issue head-on.
Preventing foreclosure can be achieved by selling your house before it goes to auction. In the event that you are able to pay your loan in full, you will not incur any penalties and your credit score will not be impacted. Conversely, if you cannot pay the full amount of the loan, you will need to compensate for the shortfall in order to avoid penalties.
Consider the following scenario: Suppose you had a mortgage debt of $100,000 on your house, but you sold it to us for $90,000. In that case, you would pay the loan company $90,000 and add $10,000 to cover the shortfall, effectively paying off your loan. Another option to avoid foreclosure is to work with a real estate lawyer to negotiate a deed in lieu of foreclosure agreement with the loan company, where you would transfer ownership of the house to the lender in exchange for them not pursuing the remaining balance.
At Bay Area Home Buyers, we’re professional real estate investors. Contact us today at 408.413.3087 to find out what our list of potential buyers can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in the Bay Area!
Why do people choose to sell their home instead of going through foreclosure? (After all, they still don’t live in their home anymore.)
Experiencing the loss of a home can be a difficult and emotional situation. The sense of stability that a home provides, as well as the many memories that have been made within its walls, can make it hard to come to terms with the necessity of selling the property. However, it is important to consider the financial implications of home loss. Waiting for the foreclosure process to reach its conclusion could result in a significant decrease in your credit score, which could in turn have long-lasting negative effects on your ability to secure loans or even find employment. On the other hand, choosing to sell your home may seem like an intimidating prospect, with many unknown factors and potential obstacles to navigate. But by working with a qualified and experienced real estate agent, you can create a plan that maximizes your property’s value and minimizes any short-term difficulties. By taking steps to sell your home quickly and efficiently, you can not only avoid the negative consequences of foreclosure, but also set yourself up for a brighter financial future.