With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process. Maybe you’re thinking what is a pre-foreclosure? Well, let’s see…
So what is a pre-foreclosure in Dallas / Fort Worth anyway?
Many homeowners across America and Dallas / Fort Worth are facing challenges in making their monthly mortgage payments. It may feel like you’re the only one, but you’re not.
When a homeowner misses 3-6 months of mortgage payments, the lending institution (or bank) will issue a warning, notifying the homeowner that they need to either start paying or lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to catch up on payments or become current. Of course this number can vary by bank and situation. So don’t think this is an absolute in every case.
If a homeowner fails to make the necessary payments, the process goes from pre-foreclosure to the bank actually then foreclosing on the home, taking ownership of the property, and will evict the homeowner. Thankfully, during this stage of the foreclosure process, the mortgage holder / homeowner has the opportunity to take advantage of several options to help prevent losing their home.
Pre-foreclosure Options for Borrowers
If your mortgage payments are past due, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. But if this happens, it’s important not to panic.
So what is a pre-foreclosure option? Well, you actually have several options…
Here are some options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage therefore receiving lower monthly payments. Check with your local Dallas / Fort Worth mortgage broker… or contact us and we can help connect you with a reputable one in the area.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Dallas / Fort Worth like us at Madison Lea Homes. In selling to us, you might be able to use the cash acquired from the sale to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments. We can buy your Dallas / Fort Worth TX area home quickly, often in just a week or two, will pay in cash, won’t require you to make any repairs, and you won’t have to go through the stressful process of putting your home on the market and the process involved in finding the right buyer. This process might just help you stay in pre-foreclosure and not have to go through the actual foreclosure process.
- You can contact the bank and ask them to allow a short sale. In a short sale, you’ll sell your home for less than what it’s worth, and the bank will take the loss as a tax write-off instead of requiring that you pay the whole amount that you owe. In some short sales, you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan. Every short sale is different because every lender is different, and every homeowner’s situation is different. But a short sale might be a viable option during pre-foreclosure.
- You may be able to declare bankruptcy, which can buy you time to pay your debt off. Bankruptcy will remain on your credit report for years, and can cause significant damage. So you probably don’t want to jump on this option unless it seems to be your only solution.
Lenders are very much aware of the widespread financial troubles across the country at this time, and often, they’re willing to work with borrowers.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least options that can help salvage your credit score.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very careful with whatever you do if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. Madison Lea Homes may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if a short sale could be an option for you.
- We can buy your Dallas / Fort Worth area house – So what is a pre-foreclosure process that you can start today? Well, we buy houses in Dallas / Fort Worth and would love to make you an all-cash offer on your house. Just fill out the form here to get started >>
- Ask us questions and we will provide you with FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or if you’d like to tap into our free pre-foreclosure and foreclosure resources.