What if you suddenly received a notice of foreclosure from your banker because of the missed payments to your home mortgage? Another way to put it is that, if you are not paying your real estate taxes, then chances are your home could be subject for foreclosure and auction by the local government.
You can successfully fight foreclosure. Here are some of the things that you can do to survive an impending foreclosure of your home.
Understand your options. Whatever you do, don’t ever ignore the notices from your mortgage company. They don’t enjoy foreclosure any more than you do – it’s expensive. Often, they will negotiate your payments, restructure your loan, or otherwise help you stay in the home.
Here are some of the workout options that your mortgagor might offer:
1. Pay the mortgage plus a little extra cash each month to cover the overdue amount
2. Reduce your mortgage payments for a short time.
3. Modify the loan to make it more affordable, such as lower the interest rate or extend the length of the mortgage.
4. Repay the past due amount over several years, add it in to the mortgage balance and spread it out over the life of the home loan.
Leave without getting fleeced. Leaving your home might be the best way ti avoid foreclosure in some cases, but you can still choose how to go.
1. The lender may temporarily halt the foreclosure to give you time to sell your home. Selling may be a tough choice, but it’s better than the bank seizing it.
2. If the property is worth less than the amount due on the mortgage, the lender may agree to accept whatever a market sale brings, called a short sale, and forgive the rest.
3. The deed in lieu is a last resort. This allows the homeowner to essentially hand the property over to the lender. By doing this, you skip both the sale and the foreclosure process. Unfortunately, you lose any equity you have in your home as well as any legal arguments against the lender.
Contact your lender as soon as possible to work out a plan and save your home from foreclosure. Follow up every phone call you make to them with a letter on what you discussed, and keep a copy for yourself. Don’t sit back and wait for the answer. Stay in contact with them until you work out a deal.
Seek expert help. As always, you aren’t alone in this fight to save your home from foreclosure. In this case, you might need the help of an attorney or a housing agency. These experts can also help you apply for financial assistance like utility programs, emergency home repair, tax abatements, which could cover your other bills while you make mortgage payments.
Beware of people who contact you offering to get you out of foreclosure, or buy the property from you. There a lot of advertisements that I’ve seen offering homeowners to buy their properties that are subject for foreclosure. Get trustworthy advice from a housing counselor or reputable attorney before you agree to any offer.
For most of us, our home is one of the most expensive investments that we had. Let’s save it from foreclosure.
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The key message is to communicate and to do so early. In most situations, talking to the lender about restructuring before the default takes place will produce a better outcome than waiting until the borrower has missed a payment.
The problems start when the loan has been packaged, on-sold and is now part of a CMO. In those situations it is often more difficult to restructure the loan.
I think here in the Philippines, foreclosures are not that big problem compared to the US. Maybe that could be a great future post bro? *wink*
Problems in foreclosure usually happens if the previous owner of the property resist or doesn’t want to give up the property. In that case, he or she became a squatter or illegal occupant. And the bank can now file an ejectment case against them.
Here in the Philippines, the owner is given 1 year redemption period from the date of foreclosure by the bank. He or she can redeem the property from the bank during this period. After this period, when no redemption happened, the bank can now fully consolidate the title of the property to its name.
I’ve been hearing about taking advantage of the down real estate market a lot lately and I was wondering if anyone knew about buying foreclosed homes cheap and re-selling them for a higher price via lease option. Is this a good idea?….Thanks,
Tyrone, please give me a good advice ( i know u have loads of them).. I bought a foreclosed property of Pag-ibig. I pay it in cash unfortunately the previous occupant do not want to let go of it. We file a case against the previous occupant.It’s now going-on for 8 months.
What I thought is a good investment turns out bad? I don’t know what are my chances.. I’m hanging on to a hope that we have not done anything illegal. What advice can you give me? Do u think the law will be on my side? help… Mian
Hi Matt, I have some questions that you need to answer. Since I have some background in real estate, I can give you some advice.
First, you mentioned that the property is foreclosed already. In foreclosure, there is so-called redemption period that gives the previous owner the chance to redeem his or her property. This is usually 1-year. Is the property under this redemption period?
Second, do you have a copy of the title? If you are the owner, then Pag-Ibig should furnish you a copy of it even if it’s not yet under your name (I believe it’s still registered under Pag-Ibig). If you have a copy of it, then who is the registered owner?
Third, what’s your proof of ownership? In foreclosure, I believe if you’ve won in the bid, you should have a Certificate of Sale. This is the proof of ownership of a foreclosed property.
Looking forward to your answers to give you a better advice.
hi there tyrone, thanks.. the property was listed foreclosed 2004 pa. We have our first negotiation with pag-ibig people in 2006 and paid the property february 2007.
They furnished us a Deed of Absolute Sale (not a Certificate of Sale), also the title and tax declaration which was all in pag-ibigs’ name that time pa. But now, we have everything transferred in our name na… What more proof of ownership do we need to make us the rightful owner of this property.
But despite all these and the notice of eviction from pag-ibig, ayaw talaga niyang umalis.. We never expected this to happen, tyrone.
With these legal docs as our evidences, ano pa kaya ang i-counter sa amin ng lawyer nya..
So, what proof of ownership their lawyer holds? Why are they claiming the property? What happened to the eviction case of pag-ibig? An ejectment case will take you years and lots of litigation expenses. If you can have an out-of-court amenable settlement with the previous owner for them to buy the property from you, then that would be the best.
Hello Tyrone,
How many months before PAG_IBIG foreclosed the property?