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Number One:
Do NOT do nothing.
Far too many people just accept what they think is inevitable, foreclosure. Do not take this path – there are options available to you.
Explore the potential options that will be best for your situation. The result of doing nothing is far too damaging for many years to come.
In addition, doing nothing and letting the property go to foreclosure leaves you open to the second lender (HELOC) coming back to you AFTER the foreclosure in an attempt to collect. When a lender agrees to and completes a short sale, we work to have them release any future rights to pursue a deficiency.
There will come a time when you will want to look back on this situation and know you did everything you could. TAKE ACTION NOW!
Number Two:
Do Not pay upfront fees!
SCAM ALERT: Unfortunately, with a housing crisis, the scam artists move in. Never pay anyone an upfront fee to negotiate a short sale. The sellers’ lender will pay all commissions, closing costs and fees associated with a short sale transaction.
Avoid any company that is asking for money upfront. There have been many cases of people paying upfront costs (sometimes in the thousands) and the company/person then “disappears” and does not provide the service(s) promised.
No company should ask for money upfront when the service has not been provided. We get paid by the bank, when the deal closes! If a company representing you feels confident they will close the deal, they won’t be asking for that money.
Number Three:
Do Not authorize a prospective buyer to deal directly with your lender.
The buyer has one goal and one goal only, and that is to negotiate a low, probably very low price with your lender. The buyer will ask your lender to accept a discounted payoff. The negotiations could go on over an extended period, and if the transaction does not work out, the buyer may elect not to buy your property. It could leave you with very little time to resolve the situation and avoid foreclosure. Further, you have no control over the information that goes to your lender or the accuracy thereof. It is entirely possible that the buyer could handle the negotiation and presentation of information in a way that makes it very difficult for you to resolve your loan situation later.
Number Four
Absolutely DO NOT ever deed your property to a third party without absolute confirmation your loan has been paid off!
If you deed your property to a third party, that party then controls the property. The new owner can rent the property (and keep the rent), attempt to sell the property to make a profit, move into the property or use the property in other ways. What the new owner might not do is make mortgage payments, and that could become a big problem for you.
Just because you no longer own the property, does not mean you are no longer responsible for the mortgage loan obligations. The lender made the loan to you. You will be primarily responsible for the mortgage obligation until it is paid off. If you give up control of the property and the new owner does not pay on the loan, the damage to your credit could be catastrophic.
Note: If you believe this option is best for you, please consult with an attorney – not the buyers' attorney – before completing the transaction.
Number Five
Do Not sell your home at a huge discount.
While most all the clients we work with in the Phoenix metropolitan area owe more on their home than it is worth, there are a few that have equity and because of a financial hardship they are now facing foreclosure. Unless the actual foreclosure sale date is less than 45 days away, you have time to explore options. As a rule, if someone is pushing you to get you to sell your property to them, it’s probably because the deal they are proposing is very favorable – to them.
If you have equity in your home, it belongs to you. For a Free, no obligation assessment, just call or email us today. |
