What is pre-foreclosure in Baltimore, MD?
We admit it is not uncommon to hear the “F” word in our large circle. However, it can be a very frightening word evoking some extremely mixed-up emotions! Wait, not THAT “F” word”!! 😊. We are talking about Foreclosure here, and more specifically pre-foreclosure, the period of time prior to the actual “F” word. In all seriousness and joking aside, we here at Lucky Home Buyers, realty consultants in Towson, truly know that receiving a mortgage default notice can feel like the wind has been knocked out of you and we don’t take this lightly. We hope that explaining the process a bit further and covering some possible solutions will help the breathing flow easier.
So, what exactly is pre-foreclosure?
Pre-foreclosure means a property is in the beginning stages of a foreclosure action. This is the legal process a lender can pursue if the homeowner is delinquent on the mortgage payments. When a homeowner misses 3-6 months of payments, the mortgage lender will issue a warning. This will notify the homeowner to pay or lose their home. This period is known as “pre-foreclosure.” A bit of good news is that mortgage lenders and banks will normally allow a homeowner to become current on their payments within a three-month period. This can vary, however, by certain situations or banks. During this stage of the foreclosure process, a mortgage holder has options to prevent losing their home.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and the property can be sold at a public auction, or sheriff’s sale, or is repossessed by the bank and the owner is evicted.
How long does pre-foreclosure last?
This depends on where the real estate is located. The process and length vary by state. The foreclosure process in a judicial state can take several months to possibly several years to complete because the foreclosure must go through the court or judicial system, being heard before a judge. Non-judicial foreclosure states are typically much faster and can take as little as several weeks to several months to complete the process before properties are foreclosed.
During the pre-foreclosure process, a mortgage holder has options that may help to prevent full blown foreclosure.
4 Options to Avoid Foreclosure on Your Home
Reinstatement
If a homeowner wants to avoid foreclosure they can request a reinstatement amount from their lender, which will include any past due mortgage payments with fees or penalties and will be good for 30 days. If paid in that time, the mortgage is brought current, the foreclosure is stopped, and the borrower is expected to make the mortgage payments as normal moving forward.
Short Sale
This is where the owner is trying to sell the property before the bank forecloses, but the market value is a little short of their balance due on the loan. Simply put, the house is sold for less than it’s worth. The bank would take the loss as a tax write-off. Depending on the bank, they may or may not accept offers less than the balance due at this point. If the owner can get the bank to short sell, it is much better for their credit. The best time for a short sale is the time period when you realize you are unable to make your payments as outlined in your loan agreement, and before the lender files legal action against you.
Bankruptcy
Considering bankruptcy could also be an option. This would buy time to pay your debt. On the downside, however, bankruptcy will remain on a credit report for many years.
Sell The House
If there is equity, the property owner can list the home for sale with a real estate agent or sell it to a real estate investor in order to pull out any equity and pay off the mortgage balance before the home is foreclosed. We have 100% got your back on this! Call us, Lucky Home Buyers, at 410-876-8765. We can give you all the advice and guidance you need, refer reputable agents, and would gladly discuss how we can buy your home in Baltimore relieving all stress, confusion, and anxiety before pre foreclosure starts.
Pre-Foreclosure can happen to the best of us and can bring out the worst for us. If you are in danger of pre foreclosure, you do not need to face this battle alone. Lucky Home Buyers is here to compassionately listen to your situation, answer all your questions (no question is too big or small) and simplify and clarify all your options. We have helped numerous people in this very situation and have found creative solutions that many didn’t even know they had. Don’t let the rug get pulled out from under you. We are waiting for your call, no pressure, no obligations, just an effortless chat about your situation. 410-876-8765
About Lucky Home Buyers
At Lucky Home Buyers, we have over 25 years of experience providing win-win solutions to help homeowners get out of their sticky situations. Issues such as foreclosure, owning a burdensome property, probate, or anything else, we focus on providing you with a compassionate solution to your situation so you can continue to do the things you love.