One of the most stressful and devastating experiences that a homeowner can go through is foreclosure, and pre-foreclose is the first step. Foreclosure is the process during which a lender takes a property back because the homeowner failed to pay their mortgage. One of the worst things about foreclosure is that it destroys the credit score, and the negative impact remains for up to seven years. In most cases, homeowners who went through foreclosure cannot receive another loan.
If you are facing pre-foreclosure, and you want to know more about it, including information on how to stop and prevent it, you should keep reading this article.
How Can You Stop or Prevent Pre-foreclosure?
If you are not able to pay your monthly mortgage payments, and you are at risk of pre-foreclosure, here is what you can do to help yourself and possibly keep your property.
Consider a Loan Modification
One of the most effective and popular options is to apply for a loan modification. If you consider this option, you need to contact your lender as quickly as possible. A loan modification means that there are changes made to the existing loan terms. In order to receive a loan modification, you have to submit an official application that your lender will evaluate and make a decision on. The good news is that most lenders agree on a loan modification because they also want to prevent foreclosure.
File for Bankruptcy
Another effective method to avoid pre-foreclosure is to file for bankruptcy. Once you submit your application, foreclosure and other creditor actions are frozen, meaning that they cannot proceed and continue foreclosure. However, this method has its own disadvantages. One of them is that bankruptcy is a temporary relief. Even if you are approved for it, you will still have to pay off your debt later.
Consider a Deed in Lieu
A deed in lieu is the process of giving the property’s title back to the lender voluntarily. It may seem like a good and easy option, but there are certain things you need to know about. The first thing you should know about a deed in lieu is that it affects your credit score, just like foreclosure. However, the negative impact is shorter — four years instead of seven.
Organize a Short Sale
Selling your property as quickly as possible may be a good option. In this case, organizing a short sale means that you agree to sell your home for less than you owe. During a short sale, the proceeds are paid to the lender by the homeowner, and the lender forgives the remaining balance.
Get a Consultation From an Expert
There are experts specializing in foreclosure that can tell you what you should do and what the best method of dealing with pre-foreclosure/foreclosure is. One of the best places to consult for a consultation is the Department of Housing and Urban Development.
Sell Your House Fast to a Cash Home Buyer
There is one option that many people do not know about. Selling your property to a cash buyer allows you to stop pre-foreclosure and avoid foreclosure. With this option, you are selling your home to a buyer for cash before foreclosure is completed. The best thing about this method is that it is fast — your deal will be closed within two weeks. Another benefit is that you are paid cash.
Are you searching for a cash home buyer in Colorado Springs, CO, to avoid foreclosure? Contact Purple Mountain Holdings and do it as quickly as possible. At Purple Mountain Holdings, we buy houses in any location, in any condition, and in any circumstances, meaning that foreclosure is not a problem for us. If you have any questions, and you want to know more about our home-selling process, please check our website or give us a call.
