Foreclosure

In both good times and bad, people can face financial challenges. During Covid, this was especially true, but moratoriums were in place to protect homeowners from losing their homes. However, as those moratoriums are lifted, people may find themselves facing the possibility of losing their homes. DO NOT WAIT! Far too often, we watch as people believe they’re only a “few more days” away from getting a loan, or selling some assets, or borrowing money from family to cure the default. The situation can become impossible if you wait until you’re down to a few short weeks before the property goes to sale. As soon as a notice of default is filed (preferably sooner) give us a call. Let’s discuss your options before we run out of time. It’s better to sell now rather than risk losing everything.

Short Sale

With properties soaring in value nowadays, we don’t see short sales happening very often. That’s not to say that they never do, but it’s not as commonplace as they were in 2007-2008. A short sale is when you owe more money than your property is worth. Frequently, the lender doesn’t want an upside down property on their books, and they may be willing to negotiate a lesser payoff amount when you sell your home. In practically all cases, they’ll require that your home actually be listed before having a serious discussion regarding a reduction in the amount you owe. We were around during the “meltdown” over a decade ago, and have a lot of experience negotiating with lenders on behalf of sellers who need help. Call us to see what your options are!

Bankruptcy

Bankruptcy is designed to help protect your personal assets when you find yourself in financial trouble. Often, once you file bankruptcy on your other debts, it’ll make it easier to manage your mortgage payment, and selling your home may not be necessary. However, if you’ve lost your job and don’t have any way of making your payments, it may be necessary to sell in order to at least protect your equity. This is very much the same as foreclosure in that much of the time, people wait too long before putting their home on the market for sale.

Most Chapter 7 bankruptcy filers can keep a home if they’re current on their mortgage payments and they don’t have much equity. However, it’s likely that a debtor will lose the home in a Chapter 7 bankruptcy if there’s significant equity that the trustee can use to pay creditors.

Other bankruptcy chapters (11 & 13) are designed to reorganize your debts instead of discharging them. In most cases, if you want to keep your house, you’ll have to continue to pay your regular payment on the mortgage. If you’re behind on payments, you’ll have to repay the arrearages in your plan. It’s always best to consult an attorney in regards to the intricacies and repercussions of filing bankruptcy. However, if you’ve decided to sell your home to give yourself a new beginning, give us a call.