What to Do When Facing Foreclosure
This is about what to do when facing foreclosure in Georgia, or at least SOME options you can take to avoid foreclosure. Some are pretty drastic, while others are not at all. Like every decision, there are advantages and disadvantages.
Of course we buy houses to prevent a foreclosure from happening, but we believe that you should be as informed as you can be to make the best choice for you and you alone!
Every day throughout the country, people face the prospect of foreclosure.
It happens so often that in nearly county across the nation and all around Atlanta, GA, there is a monthly foreclosure auction. It’s an unfortunate thing that no one plans on happening when they buy a home. Life happens though and sometimes it’s not for the best. A lost job, illness, or divorce can wreak havoc on finances and before long, unpaid bills pile up and become overwhelming.
If you’re one or more payments behind, you may feel that there’s no way out. The fear of foreclosure is real because not only could you lose your current home, but your future chances of obtaining a mortgage when things turn around for you are in jeopardy as well.
You’ve got to take action and fast!
Option One: Declare Bankruptcy
Declaring bankruptcy in Georgia is an option, and it’s the most extreme option. It’s extreme for several reasons. It is expensive, it’s NOT guaranteed to save your home (it very likely will not), and it follows you forever.
Bankruptcy should only be used as a last resort. Your mortgage can be excluded from the filing, but only if you know you can keep up with the payments. Bankruptcy will however postpone a courthouse sale of your home, but the lender will push to force the sale and they will very likely get it at some time in the near future.
It can also be expensive, which is the last thing you need when money is already in short supply.
Legal fees and negotiated settlements will need to be paid and can strip you of the necessary funds for paying your mortgage. The types of bankruptcy are chapters 7, 11, or 13. The numbers refer to which part of bankruptcy law they are found in.
They differ in how debts are handled and whether debts will be absolved or restructured. An attorney that specializes in bankruptcy would go over your options in much more detail than we will here.
Lastly, and probably the biggest concern is that bankruptcy follows you forever. The filing is publicized in the local paper because it’s a legal filing that is a matter of public record. It could stay on your credit report for up to 10 years, affecting your ability to obtain financing of any kind.
Even after it falls off your credit report, keep in mind that nearly every application for credit asks if you’ve ever declared bankruptcy, and you’ll have to answer yes to that.
With foreclosures up a little more than double the number that they were last year in Georgia, foreclosure is a real and present problem for many homeowners in GA.
However, this is not a doom and gloom post.
If a potential foreclosure is on your horizon or you’re going through one right now, you do have options to avoid it. You can also prevent damage to your credit and your future ability to buy a home.
Option Two: Catching Up the Back Payments at Once or in Installments.
Many people might be surprised to learn that their lender is very willing to work with them to prevent a foreclosure.
The reason is that they will lose a lot of money and spend a lot in going forward with a foreclosure. Banks, are in the money lending business, not the real estate business, they don’t want to take your home and deal with it.
Avoiding their calls is the surest way to guarantee a foreclosure. Remember, they want the money, not your house. One way to save your home is to convince them that you can make up for the missed payments while making your current payments.
Ask for as much time as possible to make it easier on your budget. It may be a little tougher for a while but staying in your home is worth it, right? There will be late fees and perhaps some modification fees or others depending on what they require, but this could be your best choice.
In order for this to work, you’ll probably need to be able to pay the fees up front and having them would help to convince them that you can do it. You will need patience and perseverance to be successful. It will save your house from foreclosure but it can be expensive, you’ll have to decide if it will work best for you, not just that they’ll go through with it.
Can you refinance into a new mortgage that would lower your payments and therefore ease your budget woes? The short answer is yes.
If you’re got a good bit of equity, a new mortgage should definitely have a lower payment if you can qualify for a good rate. There’s a lot of ifs though. Will the new lender approve you given your current state of default? If they do, can you refinance fast enough to stop a foreclosure?
A lump sum payoff would definitely stop the foreclosure, coming up with the money is tricky part though. This would also require negotiation and perseverance like the previous option.
You never know until you ask.
Sell Your House Through an Agent
Aside from declaring bankruptcy, catching up your payments, or modifying your mortgage, another way to avoid foreclosure is to list your house and try to sell it on the market.
It’s a decent alternative but your situation needs to be thought about carefully.
Currently, there are about 3-4 months of inventory across the metro Atlanta market.
In December, One third of active listings had a price reduction. Whether it was the rate hikes that occurred throughout 2018 or the rapid increase in prices over the last few years slowing things down, no one can be certain, but they definitely slowed down.
Another thing that may have been putting the brakes on a hot market were buyer concerns over future economic conditions due to recent tariff increases and a government shutdown that is now over. Whatever the reason may be, the housing market slowed considerably during the early winter months.
That’s not entirely out of the norm for winter though. For January 2019 in Fulton County, the number of closed transactions across every zip code were down 90-95% and 100% in some zip codes when compared to January 2018.
Can you sell a house quickly even in these current trends? Absolutely yes.
The question is will the current pool of buyers want your house. The condition is the biggest factor when your house is compared to similarly priced houses in your neighborhood.
If it’s a bit of a fixer upper, the pool of buyers will grow smaller, perhaps only investors will consider it and maybe banks won’t even lend on it because of the state it’s in.
If you do find a traditional buyer, they will need 3-4 weeks to obtain bank financing and even then, the closing could fall apart right at the last minute.
When banks are involved, it’s not a certain sale until it’s closed, loans can be pulled the morning of a closing, it’s happened.
There’s also, the time aspect. The foreclosure date could come before a scheduled closing, who knows if the lender will postpone the sale to wait on a potential closing for their payoff.
Sell Your House to a “We Buy Houses” Type of Company?
If you’ve made it this far, you may still feel like you have no good options.
Others have felt the same way but they found out that selling to us was a quick and painless way to stop foreclosure and save their credit.
If you’re facing foreclosure currently, a decision has to be made quickly. You have some options, but you unfortunately don’t have a lot of time.
Let’s look at some of the advantages in selling to us:
- We can close fast, very fast. Because we buy with cash, we can close on the purchase of a house in as little as a week.
- You wouldn’t have any fees like commissions or closing costs other than taxes. If you have enough equity in the house, you may still walk away from the closing with a check.
- Selling to us would be a good ending to something that you may have resigned yourself into to expecting to be horrible. Working with us will relieve all the stress and worry that you’ve been going through and you’ll walk away smiling.
Of course this isn’t an ideal selling situation, nor is it one that you probably ever expected to be in.
The advantages and disadvantages are clear.
Not doing something has a certain result. If you don’t file for bankruptcy, find some way to catch up the payments and/or modify the loan, or sell to a home-buyer like us, you will be foreclosed upon.
That’s a harsh reality, but it’s the truth.
The idea of selling your house to some people that you don’t really know, and just heard of, is probably scary. We understand that, and it’s to be expected.
You may be wondering if we can really help you, and the answer is definitely, yes!
Helping people is the biggest part of our business. You may have seen signs on the side of the road about house buyers or have seen other companies advertising a similar service. Many companies and people say, “We buy houses”, but there are a lot that don’t actually buy houses.
They say they do, but their real intention is to get a contract on your house, mark up the price and then sell their contract to another buyer. While that isn’t illegal and it’s an option we have taken, it’s not our only method of investing in real estate.
People and companies that focus on that method, may suddenly cancel on you because they can’t find a buyer for their “deal”, which leaves you high and dry.
And all the while, you thought your trouble was about to be over. Our intention from the start of every situation is to take a property and renovate it so that it’s beautiful, which we then sell for a profit. Yes, we intend to make money, we wouldn’t be able to help anyone if we weren’t making money. But we can’t make any money IF we don’t first help someone in a tough situation.
Go Ahead, We’re Here for You?
We buy houses fast for cash. Selling to Real Ventures, LLC would stop your foreclosure or prevent one from being filed. You would pay no closing costs other than taxes or any outstanding liens. Perhaps it would mean, being able to prevent a foreclosure on your credit and starting over. Reach out today and we can figure out what works best for you. Fill out the contact form below or go over to learn how our process works here.