Avoiding Forclosure and What to do if it's close

The Number of Foreclosures have doubled!

Many of you have heard the statistic that the amount of foreclosures have doubled. This is correct we have gone from 1% of all home owners with a mortgage losing their home to foreclosure up to 2%. The good news here is that 98% of all home owners with a mortgage are not losing their homes. 7% of all U.S. mortgages are sub prime mortgages and those mortgages make up 42% of the foreclosures. Almost half. If you take away the sub prime mortgages then foreclosures would be up just over 1%. The bottom line here is that if you have a sub prime mortgage with an arm that is set to reset to a higher interest rate, if you bought more home than you can afford, or if some life altering event has occurred you face a legitimate danger of foreclosure.

Before the Foreclosure:

If you begin to have trouble making your payments the first thing that will arrive in your mailbox will be a a letter from your loan servicing company reminding you that your payment is past due and usually indicating the actions they can and will take to remedy the situation. Ideally if you think you are going to get to a point where you will miss a mortgage payment or your payment is going to adjust above what you can afford, you should look to get help before going 30 days behind on your mortgage. 30 days late is the magic number that will appear on your credit report. A mortgage late can seriously hinder your chances of refinancing out of this bad loan. You still have several options at this point and will want to speak with someone who has your interests in mind and will work with you to find the best possible solution. Please see the next section as it is very important that you recognize and avoid the "Save you from foreclosure" scams.

Once you Receive a Notice of Default:

If it's too late for you and you have fallen several payments behind you will receive a notice of default from the loan servicing company. Sadly this information is public knowledge readily available at most title companies. Your credit will be scarred and you will be in serious jeopardy of losing your home. On top of this many people will begin to contact you about "saving you from foreclosure" and you may even begin to notice the foreclosure help signs on the side of the road or even vehicles. If you are in this boat you NEED to be aware that you have options and steer clear of the foreclosure help scams. Some companies will offer to buy your home and rent it back to you letting the rent go toward the principal and preserving your equity. Others will offer a counseling service and offer a fee. Many will have you sign a "new loan" form and most will require you sign over the title. These programs are bad and clearly designed to prey on your bad situation. The BEST thing to do is to speak with someone you can trust to point you in the right direction.

The Options:

Speaking with someone who understands all the options available in pre-and post foreclosure is the single most important thing you can do to get back on track. In many cases a government secured refinance program called FHASecure can help you refinance to a low fixed rate saving you from getting into the mess in the first place. In other cases aggressively pricing your home and selling it is the best plan of action. If you have fallen severely behind but foreclosure has not started yet one option that may fit your needs is working with a Realtor® on a "Short Sale". This is a process where you and your Realtor® work directly with the bank to allow a sale price of your home that is less than what you actually owe. In any of these cases I would recommend working with someone with experience in the area as it is not a cut and dry solution and what may be the best option for 1 is not the best interest of another.
How To Determine YOUR Best Option:

Determining the right long term solution for you requires an in depth look at your overall situation and your long term goals. If you fear you might not be able to make your payments soon, if you are in an arm that is going to reset, if you have a pre-payment penalty, if you are behind on your payments, or if foreclosure has started, contact me right away and I can get you in contact with the right person for your situation. No I do not charge a consultation fee and no I do not want you to sign over the title. I am a Realtor® and a homeowner just like you and I know how confusing it can be to tell the difference between a helping hand and a shady dealer in times of desperation. It's not too late you DO have options. You may call me directly @ (801) 330-3963 send an e-mail to Dave@ListedInUtah.com or simply use the Messenger box on the sidebar of this page to contact me anonymously.