When does foreclosure begin?
Lenders will initiate foreclosure
proceedings when homeowners become delinquent in their mortgage obligations,
usually after three payments are missed. The lender will then notify the buyer
in writing that he or she is in default. The lender can request a trustee's sale
or a judicial foreclosure, in which the property is sold at public auction. A
borrower can cure the default by paying the overdue amount and the pending
payment after the notice of default is recorded, usually no later than a few
days before the property's sale. Some sales allow the successful bidder to take
possession immediately. If the former owner refuses to vacate the premises, the
court can issue an unlawful detainer that allows the sheriff to come out and
evict them. Borrowers should do everything they can to avoid foreclosure, which
is one of the most damaging events that can occur in an individual's credit
history.
How long do bankruptcies and foreclosures stay on a credit
report?
Bankruptcies and foreclosures can remain on a credit report for
seven to 10 years. Some lenders will consider an borrower earlier if they have
reestablished good credit. The circumstances surrounding the bankruptcy can
also influence a lender's decision. For example, if you went through a
bankruptcy because your employer had financial difficulties, a lender may be
more sympathetic. If, however, you went through bankruptcy because you
overextended personal credit lines and lived beyond your means, the lender
probably will be less inclined to be flexible.
Can a home seller sell
a home for less than its mortgage?
Yes, in some case you can sell your
home for less than what you still owe on the mortgage. But it is complicated and
depends on the lender. This situation is known as a "short sale." Sometimes a
lender will be willing to split the difference between the sale price and loan
amount, which still must be paid. A short sale may be more complicated if the
loan has been sold to the secondary market because then the lender will have to
get permission from Freddie Mac, the two major secondary-market players. If the
loan was a low down payment mortgage with private mortgage insurance, then the
lender also must involve the mortgage insurance company that insured the
low-down loan.
How does a home go into foreclosure?
Foreclosure
proceedings usually begin after a borrower has skipped three mortgage payments.
The lender will record a notice of default against the property. Unless the debt
is satisfied, the lender will foreclose on the mortgage and proceed to set up a
trustee sale.
How does someone sell a slow mover?
Even in a
down market, real estate experts say that price and condition are the two most
important factors in selling a home. If you are selling in a slow market, your
first step would be to lower your price. Also, go through the house and see if
there are cosmetic defects that you missed and can be repaired. Secondly, you
need to make sure that the home is getting the exposure it deserves through open
houses, broker open houses, advertising, good signage, and listings on the local
multiple listing service (MLS) and on the Internet. Another option is to pull
your house off the market and wait for the market to improve. Finally, if you
who have no equity in the house, and are forced to sell because of a divorce or
financial considerations, you could discuss a short sale or a deed-in-lieu-of-
foreclosure with your lender. A short sale is when the seller finds a buyer for
a price that is below the mortgage amount and negotiates the difference with the
lender. In a deed-in-lieu-of-foreclosure situation, the lender agrees to take
the house back without instituting foreclosure proceedings. The latter are
radical options. Your simplest, and in many cases most effective, option is to
lower the price.