When dealing with foreclosure in Nashville, there are a few options available to you that will help prevent your home going to auction.
Depending on where you are in the process or long remains before the auction date, if it’s set, some options may no longer be available to you. So, it’s important to take action immediately before it’s too late.
Notice of Default
The notice of default is the official letter from your lender that your loan is default and they are preparing to take action by placing a lien on the property and moving towards a foreclosure.
If you haven’t received this yet, then you still have a chance to catch up on the past due payments or negotiate without having heavy penalties. But if you have received the notice, then your penalties are likely already tacked on.
This is typically what would be categorized as the arrears, meaning all the owed money, penalties, and costs directly related to the filing of lien and motions towards foreclosure.
Once arrears are in place, you may have thousands owed to the lender on top of your mortgage. For a $110,000 loan, this can be as much as $9,000 (including the past due amount).
Once you’re at this point, these are some of the options you might want to consider:
File For a Loan Modification
Lenders have a process called a loan modification, which is when the lender takes your arrears and append them to the back of the loan.
When this happens, the lender puts you through a trial period (typically 3 months) and once the trial period is completed, then the loan modification is finalized. At this point, your loan is “reset”, meaning it will be re-amortized and set back to a full 30-year loan, with the interest being the current market interest.
Once you file for the loan modification, the lender, by law, must stop the foreclosure process until they’ve approved or denied the application.
The underwriters will review the application and a number of factors to determine risk and any potential loss of income to the lender. If the underwriters think the risk is too high or that the company will lose less money letting it go to auction, then they may deny the application. Additionally, if it’s an investment property and not your personal property, you may also get denied.
If it’s approved, then you’ve prevented the home from going into foreclosure, and you just need to continue making payments.
If it’s denied, then you will want to look at the next option.
Selling The House
Selling your house in Nashville is a very viable option to preventing foreclosure.
Although your initial thought is to try and keep the home, sometimes selling the house is a better option.
If your loan modification application was denied, then this might be one of the best options available to you.
If it’s likely that the home will go into foreclosure because you can’t prevent it or you can’t afford to pay for the arrears, then selling the home can help you preserve your credit report from getting completely trashed, keeping you from getting another home for years.
Selling your home can potentially stop the foreclosure and keep some money in your pocket due to whatever equity is in the house.
Choosing the method of selling your house
Depending on your current timeline, choosing how to sell your house can be crucial to making sure your house isn’t sold at auction.
If you want market value and your home is in good condition, you could consider working with a real estate agent, but you need to make sure that it’s priced right and your agent is doing proper marketing.
High quality pictures, staging, and proper showings will help make sure that your home is getting in front of buyers.
But if your home need some repairs or there’s not a lot of demand for your area or type of home, going with an agent can be very risky.
The most common issue with a traditional home sale in these cases is that the listing doesn’t get any interested buyers by the time the home goes to auction, and the homeowners is locked into a contract.
If you’re too close to auction, then you can get in trouble if you try to sell with an agent.
Additionally, you want to check the contract to make sure you can cancel a contract with an agent so that you can utilize other options to prevent the home from going into foreclosure.
We buy houses in Nashville, so if you need to sell the house, give us a call or fill out our form, and we can come up with an offer for your property. Because we aren’t going through the approval process with a bank, we don’t have to wait for approval or all the other red tape that comes with a normal sale. We can buy the house from you days before the auction, and you don’t have to pay for any repairs, fees, or closing costs.
Doing a Short Sale
Sometimes, the mortgage is higher than what the home is worth, and we need to help by moving towards a short sale.
A short sale is when the bank approves letting you sell the home at a price that’s under what you currently owe. They will typically allow this because they will get more for the home than letting it go to auction.
Negotiating a short sale is more of a process than most other forms of selling, so it’s important to work with someone who is a short sale specialist.
If you are working with us, we’ll be able to determine if a short sale is appropriate and we’ll work with the lender to purchase the house using this method.
Filing For Bankruptcy
Bankruptcy is often used as a method to stop a foreclosure, but there are costs involved.
Most of the time, bankruptcy is used when you have a lot of debts that need to be paid off, so paying the costs of filing and moving forward with it is feasible.
If you don’t have any other debts that need to be paid, then it might not be worth going straight into a bankruptcy.
Sometimes, if the situation is a bit more complicated, then filing for bankruptcy (but not necessarily completing it) will prevent the house from going to auction. But this is only a temporary stop and you still need to resolve the issue.
Resolving Your Foreclosure Problem
We think that the best option is to sell the house, and we can help you do that by buying your Nashville property in cash. This may be the best option if you’re dealing with foreclosure and don’t have enough money to put into repairs or enough time to deal with the foreclosure in any other way.
The longer you wait, the more likely you will lose the home, so get started today!