In The Pre-Foreclosure Timeframe Is It Possible To Save My Home?
When you start to fall behind on payments, it is hard to climb back up that hill and get caught up. During the pre-foreclosure period, you can contact your bank or your servicer and tell them that you’re interested in working out a plan, whether that is a modification or something else. There is a concept called a forbearance agreement where you get caught up on what you owe in a short period of time. You might owe thirty thousand dollars and they’ll give you six months to catch up on that 30 thousand dollars. It is possible, during the pre-foreclosure period, to try to work out some sort of a deal with the bank and save your house.
Should I Reach Out To My Bank Before I Contact An Attorney In Pre- Foreclosure Stage?
I don’t think that you necessarily need an attorney in the pre-foreclosure stage. There is not a lot of value-added by having an attorney at that stage because, at that point, you can still negotiate with the bank on your own. Typically, when you try to get a loan modification, the bank will ask you to submit certain information. One example would be a form that will explain your income and your expenses for a given month.
In a modification package, banks will ask for a copy of your most recent bank statements as well as proof of your income. They may also ask for your income tax returns so that they can evaluate whether or not you can afford the house and whether or not they would be willing to modify your mortgage.
Should We Sell Our Home Before It Heads To Foreclosure?
If your home is worth more than what you owe and you have equity in your home, it might make sense to sell your house, cash out your equity, and move on with your life. If your house is worth four hundred thousand dollars, you owe three hundred thousand dollars, and you’re about to go into foreclosure, you could sell it and walk away with a significant amount of money. If you wait for years and you don’t pay your mortgage, after one year, you may have eaten up twenty-four thousand dollars’ worth of your equity, for example. Assuming the value of your house doesn’t go up dramatically, all of that equity you have is going to be stripped by the bank. They’ll eat away at your equity while the foreclosure proceeds. If you have a lot of equity in your house, it may be best to try to sell it right away.
On the other hand, if your house is worth two hundred thousand dollars and you owe the bank three hundred thousand, you can’t just sell your house because you can’t sell it free and clear. In that case, if you wanted to try to sell your house, you would have to see if you can get approved for a short sale. For a short sale, you need the bank’s approval to take less than what they’re owed to satisfy the mortgage. Oftentimes, banks are much more open to a short sale after litigation has gone on for a while and they realize that the cost of the litigation is going up and there is no equity left in your house. At that point, they will be more likely to approve a short sale.
For more information on Saving Your Home, Pre-Foreclosure In NY, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (212) 766-9779 or (718) 979-9779 today.
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