Foreclosure

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WHAT TO EXPECT WHEN YOU STOP PAYING MORTGAGE

 

Foreclosure can be a scary thing. If you fear that you will experience foreclosure or are already going through pre-foreclosure, you should know that there is still hope. You don’t need to sit by idly and watch your home and your equity slip away. By working with qualified Pembroke Pines foreclosure specialists, you can fight for your property and your future.

Here at Redhead Realty, we know how hard you’ve worked for your property. For every day of the preforeclosure process, you lose a little of what you’ve put into your home. We want you to know about your options and navigate you to a better outcome.

How Does Foreclosure Impact Your Equity?

Before you learn more about preforeclosure, you should understand a little about equity. Home equity refers to the difference between the present market value of a home and the amount the owner still owes. More simply put, it’s the portion of the home actually owned by you. If you bought a $300,000 home and already paid $100,000 towards it, your equity would be $100,000.

If your home goes into foreclosure, some of the equity is still yours. However, the amount of equity you can keep varies according to state laws. In many cases, the lender sells the home and has more money than the remaining balance on the loan. Once the loan and other fees are paid off, the remaining money is equity. It can go to your bank account.

How Preforeclosure Impacts Your Equity

Even before foreclosure takes place, your equity can be decreased. This is because you face penalties for being late on your mortgages. When you make a late payment, you incur fees. Consider this example. You miss four months of mortgage payments. After the fourth month, your loan goes into default. You get four months of late payment penalties added to your loan amount.

When the bank sells your home, more money from the sale of the home goes towards the loan and late fees. Your left with less equity. There are many other fees associated with preforeclosure and foreclosure. After everything is complete, you could have thousands of dollars less in equity.

How Will Foreclosure Affect You?

The foreclosure process does much more than decrease your equity. In addition to leaving you with less money, the process can do all of the following:

  • Lower Your Credit Score

    Foreclosure does more than lower your credit score by a few points. After foreclosure, your credit score could be up to 400 points lower than it previously was. This can bring you many challenges as you try to recover. With such a low score, you may find it difficult to rent a home.

  • Has Long-Lasting Impact on Your Credit

    Your credit score can impact your credit score for years after the foreclosure process. In fact, it can affect your credit for more than ten years.

  • Inability to Buy a Home

    The foreclosure could prevent you from buying a new home. It could be as long as seven years before you are able to purchase again.

  • Wage Garnishment

    If the bank is unable to receive enough money from the sale of your home, they could garnish your wages. This could last for as long as 20 years.

  • Future Loan Application May Be Denied

    Foreclosure can leave a black mark on your record. If you apply for a loan, the lender is unlikely to approve your application.

  • Fewer Employment Opportunities

    Due to your back credit, you could have fewer employment opportunities. Employers can ask to check your credit report. If they see that you’ve gone through foreclosure, they might not hire you.

  • Face Immediate Eviction

    Once foreclosure begins, you may not have much time in your home. The bank could ask you to vacate and immediately begin the eviction process.

Step by Step of the Foreclosure Process

The foreclosure process can be confusing. However, knowing the step-by-step process can make it less intimidating. It may also prepare you to stop the process before it changes your life forever.

After you miss three payments, they start to exercise their rights to recover the house. But they can’t just say “you missed some payments, give me the keys”. They have to go through a legal process and file a Foreclosure lawsuit in order to get the property back.

Here are all of the steps of the process:

  1. The court sends out a “Lis Pendens” notifying you that a foreclosure lawsuit has been filed against you for not making proper payments.
  2. The court sends out a “Summons” to which you have 20 days to dismiss the lawsuit via loan modification, short sale, or other solution.
  3. The bank provides the judge a payout. This statement is a full itemization of all the expenses that are owed to the bank including the remaining balance on the mortgage, penalty charges, interests, attorney fees, etc. This Amount Increases Daily!
  4. The judge grants the “Final Judgement”. This document informs you of when the property is to be sold at public auction, usually within the next 60 days.

It’s important to realize that you may be able to postpone foreclosure at almost any point in the process. However, you need to take the proper steps to do so. Typically, this involves working with one of the aggressive Pembroke Pines foreclosure defense attorneys. Keep in mind, while postponing your case provides you more time in your house, the threat of foreclosure still remains.

 

How Can Redhead Realty Help Me Avoid Foreclosure?

We assist homeowners in preforeclosure by taking the time to fully educate them on ALL of their options. From our experience, most homeowners only know about 10% of the foreclosure process. We take the time to sit down with you, break down the pro’s and con’s associated with each option you have, and allow you to make the best decision for you and your family. Our number one priority when helping families in these positions is to do whatever we can to help them KEEP THEIR HOME. If we are unable to do so, we are able to offer alternative solutions that allow homeowners to avoid foreclosure entirely and remove themselves from this financial hardship.

 

All of the following are ways in which we may be able to stop the foreclosure process:

Bankruptcy

Cost: Cost of $3,000 up to $5,000
Credit Score: Damaged!

Bankruptcy is the MOST EXPENSIVE option and doesn’t mean you can keep your home!!

Some attorneys advise homeowners to declare Bankruptcy. This will not only cost $3000-$5000 on average, it will ruin your CREDIT for the next 7-10 years! This will make it difficult to buy another home in the future. This will also keep you from getting Car Loans, Credit Cards, and can keep you from renting another property!

Unfortunately, getting pressured into bankruptcy can change your life for the worse. If you aren’t fully aware of the consequences of bankruptcy, you could be in for a rude awakening. You should consider all of the implications of bankruptcy before you decide to go through with it. At times, bankruptcy can be just as bad as foreclosure.

Loan Modification

Cost: Monthly Attorney Fee $500-600 (Can run upto $6000+)
Credit Score: Damaged!

A loan modification involves negotiating with a borrower and coming up with a compromise. However, there are tax consequences that come with a loan modification.

The National average for approval of Loan Modifications is less than 20%! This is your best option if you wish to keep your home, BUT you will owe more than what you owed before going into foreclosure! In the end, this may not be the best option for you.

The bank will add INTEREST, LATE FEES, THEIR ATTORNEY FEES, ADMINISTRATION FEES, AND MORE to your principal!!

Deed In Lieu of Foreclosure

Cost: Monthly Attorney Fee $500-600 (Can run upto $6000+)
Credit Score: Damaged!

Lender accepts deed to homeowner’s property; however, if the lender sells the home for less money than is owed, you will be responsible for paying the deficiency. The only scenario where a deed in lieu makes economic sense is if the lender agrees to an Acceptance Agreement so the Homeowner won’t be responsible for any deficiency if the house sells for less than what is owed. This agreement being approved by the lender is highly unlikely.

Short Sale

Cost: FREE!
Credit Score: Good! (Only lowers 50-70 Points)

With a short sale, you can move on and not have to worry about paying on your mortgage again. After succesfully avoiding having a foreclosure on your record, you will walk away without owing the bank any remaining deficiency. Thus, giving you financial freedom moving forward. You may even be able to purchase a new home immediately!

Our short sale negotiators have a 99% approval rating!
Click Here to Learn More

Pay Off

Cost: YOU Profit!
Credit Score: Saved!

In a payoff, you walk away owing the lender $0, and you will most likely profit at closing. We payoff all of your mortgage fees including all the late fees, penalties, and attorney fees. You will have completely avoided having a foreclosure on your record.

No expense is needed in repairs, we buy the home AS IS. We close quickly and you pay $0 in realtor commission.

Why You Should Work with Us

Every day that your home is in preforeclosure is a day that you lose equity on your house. After all the time and money you put into your home, you shouldn’t be satisfied to let the fees start piling up. By working with us at Redhead Realty, you can take a step in the right direction.

You can work with an attorney to dismiss your case before it goes into foreclosure. However, they can only postpone your case. They might buy you time, but they won’t come up with a solution to your problem. You get a small bandaid for a big wound.

Fortunately, we don’t postpone your case. Instead, we give you a permanent solution for your problem. If you have equity in your home, we can buy it from you and alleviate all of your stress. The financial hardship that was on your shoulders will no longer be there. In fact, you may be able to escape the situation with some money in your pocket.

Even those who have no equity could get help. We can do a short sale. With this option, you can remain in your home for between four and six months. By negotiating with the bank, we can come up with a deal. Then, you can walk away from your property and not owe any money.

Getting Started

In Broward County, 53.9% of households are cost-burdened. The county has an affordable housing crisis which has resulted in many foreclosures. Individuals and families in Pembroke Pines are at a high risk of foreclosure.

If you’re one of the many people who is facing foreclosure, you should seek help. Contact us at Redhead Realty and start making your way out of preforeclosure.