How To Avoid Foreclosure In Baltimore When Behind On Payments
You may be wondering how to avoid foreclosure in Baltimore when behind on payments. There are various options available for a homeowner in Baltimore, MD to avoid foreclosure. Doesn’t matter if you’re looking forward to selling the house or keeping it before a pending foreclosure auction, you must act quickly before you run out of time.
Let’s jump right into the options…
How To Avoid Foreclosure In Baltimore: The Steps You Need to Take
1. Asking For A Loan Modification
If you’re close to facing foreclosure don’t plan to sell the house, the first thing you should do is call your mortgage lender. Consider asking them for a loan modification. There are protections from the Consumer Financial Protection Bureau (CFPB) applicable for homeowners in Washington DC. These protection rules are present to protect mortgage borrowers from any unexpected financial obligations or runarounds.
However, if you don’t have a steady income, asking for a mortgage modification is not recommended. If you do, ask to pay for mortgages with lower rates. If you make that decision, the first thing is to contact your local bank or mortgage servicer to arrange the deal.
Of course, both your bank and mortgage services will require you to provide proof that you’re unable to keep up with the current mortgages. If your reasons are valid and the modification is accepted, you’ll be put on hold for a trial period of 90 days if not more. This trial period is meant to test if you’ll be able to pay at these lower rates on time, and if you can, you’ll keep the loan modification.
Unfortunately, the negotiating process isn’t as easy as it sounds. The bank and mortgage servicer might give you a hard time finishing your request. Be prepared for this process to be a headache for some time. After all, it’s better than losing your house.
2. Selling Your House
Sometimes selling the house altogether is the best option there is. If you’re not sure of your upcoming income streams, or would simply prefer to sell the house. There are two options to sell your house. The first one being contacting a Realtor, or posting it on the market with a For Sale By Owner note.
However, it is crucial to note that if you’re selling for the sake of avoiding foreclosure and you owe an amount more than what your house can be sold for, you must sell the house by an approach called ‘Selling Short’.
A short sale is when you owe the mortgage lender more than what the house is actually worth. A short sale is done when your mortgage lender is willing to accept a sales price less than the amount owed. By doing this, you have the opportunity to not pay any outstanding balance, and escape from your mortgage payments. In short sales, there’s a chance that debts can be settled or talked through.
However, this isn’t all certain, especially for Baltimore, MD homeowners. Understand that mortgage lenders are different, some might accept you not paying the outstanding balance, others might not. Also, short sales lower credit scores which make it difficult to finance other housing later on. So, it’s better to plan other housing before completing the process.
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.