What exactly is a Foreclosure?
Foreclosure relates to the legal process whereby a property, pledged as collateral for any debt is sold to satisfy the debt.
Whenever a borrower obtains mortgage finance from a lender he agrees a couple very important conditions on the loan, in which he pledges the house or property as collateral.
- He promises to make payments as stated by the conditions on the loan.
- He pledges his home as collateral.
When the borrower fails to make a payment, the individual is in default.
When the lender accelerates the mortgage or activates the due on sale clause the mortgage loan becomes due and payable and the lender
starts the court proceedings against the borrower, in order to force the sale for the collateral property to fulfill the loan debt, this is the process called foreclosure.
Foreclosure can often be considered an ending event. You hear people say, “they got foreclosed on, or the individual is in foreclosure.”
Foreclosure isn’t an event, this is actually a process.
Specific Options Homeowner’s Have:
Lenders will allow a borrower pay less than the total amount of the mortgage, or skip some payments, should there be a reasonable plan to make the late payments and bring the loan to a current condition.
A homeowner may be able to produce an extra payment that covers the late payments at the end month until the past due amount has been paid.
Lenders may sometimes modify the terms of a mortgage to aid a homeowner avoid foreclosure. Options include these:
- Adding all of the missed payments on the loan amount to the monthly installment to cover loan.
- Increasing the loan term, reducing the rate of interest, and/or forgiving a portion of the loan obligation to lower the monthly payments.
For help with your loan modification, contact us at (786) 375-5725 ext. 305 or click
A homeowner could be allowed to return the property to the lender in exchange for debt forgiveness, an option that can hurt your credit but one that is better than having a foreclosure in your credit history.
A short sale is when the lender will agree to accept less for the property than is actually owed on the property.
Why do a Short Sale?
The decline in property values due to the resent Real Estate market crash has left many property owners owing more on their mortgage than the current market value of their property. As Adjustable Rate Mortgages mature and begin to adjust, coupled with the rise of Property Taxes and Insurance, an alarming number of homeowners have been forced to just walk away from their homes and enter the foreclosure process.
The “Short Sale” is a process whereby a Lender approves the sale of a property at current or slightly below market value when it is determined that the market value is less than the mortgage amount owed, thus avoiding costly foreclosures. This event produces considerable opportunities for investors as well as other buyers to profit from the current conditions found in today’s market.
Short Sales offer troubled homeowners a way out of their mortgage avoiding the strong negative impact that a foreclosure brings on their credit history. The process also mitigates for the lenders to avoid the costly and lengthy foreclosure process while avoiding carrying bad debt on their financial statement.
While most Real Estate professionals avoid the challenging Short Sale process, our Short Sale Specialists at Top Gun Brokers have completed an extensive twelve month training course at a Real Estate University enabling us to successfully handle every aspects of a Short Sale. This training has given our team the expertise necessary to successfully, and consistently, negotiate Short Sales, yielding substantial discounts to investors while avoiding a foreclosure for the property owner.
Top Gun Brokers is well-prepared to work with a client facing foreclosure and meet their needs in a professional and efficient manner.
In the foreclosure process time is critical.
avoid foreclosure now.
For help with your short sale needs contact us at (786) 375-5725 ext. 304 or provide required information to help us determine if you qualify for a Short Sale on the short form below.