What is a Pre-Foreclosure?
With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in anyway?
Many homeowners across America and Omaha are facing difficulties making their monthly mortgage payments.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation sometimes.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.
Pre-foreclosure options for borrowers.
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Omaha mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Omaha like us at Omaha Homes For Cash, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Omaha NE area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways we can get involved.
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Omaha area house – We buy houses in Omaha and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.
How to stop foreclosure.
If the bank is threatening to take your property after all you have put into it, we can help you stop the foreclosure of your house in Omaha! Keep reading to learn about what you can do to fight back!
Dealing with the threat of foreclosure can be extremely overwhelming. The thought of losing your house after putting so much of yourself into it can feel devastating, and that’s not to mention the ugly marks it will leave on your credit. Nobody wants to deal with foreclosure, but luckily there are some things you can do to avoid it. In our latest post, we will help you learn how to stop foreclosure of your house in Omaha.
Call Your Bank
When it comes down to it, most lenders would rather work with you to get back on track then put the house into foreclosure. While the process isn’t fun for you, it isn’t fun for them either. It is costly and time-consuming, and in many cases, leaving the lender with a loss. They will do what they need to, to recoup their costs, including working with you to find a solution. When you first realize you are going to have trouble with the mortgage payment, reach out to your bank. If you are behind on your payments, you will likely be able to work out a repayment plan. If you think that paying your mortgage is going to be difficult going forward due to new circumstances in your life, you may want to stall the foreclosure and sell the house while you still can.
Sell Your House
A fast sale of your house can help you to quickly pay off your mortgage, without any negative marks on your credit. Listing your house in Omaha doesn’t necessarily guarantee your house will be sold quickly. Selling in this manner can take months, allowing the bank to foreclose on the house while it is listed.
On the other hand, a direct sale to Omaha Homes For Cash will allow you to sell your house quickly and for a great price. Working with our team will let you choose the closing date that works best for you so that you can sell the house outright before the bank comes knocking. Our process is fast, convenient, and always fair!
Use A Short Sale
Another way to sell your house fast in Omaha to avoid foreclosure is by using a short sale. A short sale occurs when your lender agrees to take a lower offer for the house, just to save them the time and money of reselling it themselves. To do this you must apply to your lender’s short sale program and meet the necessary requirements. You’ll need to run a BPO or Broker Price Option, to help you determine the fair market value for the property.
When you declare bankruptcy, the bank will be forced to stop any collection activity against you, including the foreclosure of your home. That said, you will still be responsible for your debts. The bankruptcy court will work with you to set up a plan of repayment. Declaring bankruptcy doesn’t look very good when trying to borrow money in the future, so make sure it is the right choice for you before signing any paperwork.
No homeowner wants to have their house taken out from under them. If you are behind on your mortgage, don’t fret. There are ways to avoid foreclosure and sell your house before the bank begins the foreclosure proceedings against the property.
How you stay in your home after foreclosure.
A recent study estimates that 47% of foreclosed properties are still occupied.
When you first see that stat you may be surprised… but we’re not.
What most people don’t realize is that banks aren’t in the business to own homes.
They are in the business to loan people money. But when they have to foreclose on a house… the bank is forced to own the home until they’re able to sell it to get all or most of their money back.
But, what they had found is that when a Omaha foreclosed house goes vacant… there is a much greater chance that the house will fall into disrepair. Often times the bank would rather have you in the property even after you stop paying your payments and the foreclosure is started because it wards of vandals and keeps the house in good working order.
There’s been a lot of talk in the media about people living for free after foreclosure – and even many stories about banks “abandoning” properties.
In those stories, people are avoiding house payments for months, even years.
Man, that sounds great! Let’s all live for free. (wink)
Wait… it can’t be that simple, right? Right.
No bank would purposely neglect to collect payments. The only way that you get to live without making any payments is when some major mistakes were made.
But you might get lucky! It’s possible, and it’s happened before. However, it’s not exactly legal to avoid payments that you owe, and it can get you in serious trouble.
So why are so many foreclosed homes occupied? It’s important to remember that no one wants the house to be vacant. Vacant homes are targets for vandalism and crime.
Staying in the property can help the bank maintain the value of their investment, so it’s actually in their best interests to keep it occupied. Partly because of the ways that the foreclosure laws are structured in NE, banks may ask you to leave while wanting you to stay.
There are a few perfectly legal ways to remain in your home, even after foreclosure.
Not all these options are available (depending on your situation and your lenders), and you’ll need some expert advice along the way to help you get through.
1) Wait it out. Honestly, this is a pretty bad option, but it seems to be increasingly common. You definitely shouldn’t run away and abandon your house when the first notice of default shows up. Remember that the proceedings and the process takes months and sometimes years. It’s not over until it’s over, so don’t give up too early. On the other hand, don’t wait until the sheriff shows up to evict you to start packing up your stuff.
2) Go to court. In very rare cases, judges are granting stays and delaying evictions. This is really only a valid option if you (and your attorneys) can prove that the bank has neglected a legal requirement during the foreclosure process. During the past few years, a lot of fraudulent behavior at banks has been uncovered – so we may see an increasing trend of using the courts to stop foreclosure. Fighting banks with lawyers is very difficult, expensive and time-consuming, even if you’ve got a perfect case (most people don’t stand a chance).
3) Propose a move-out bonus. Often buyers of occupied foreclosure properties spend thousands of dollars on lawyers and other costs of eviction, so why not save everyone the time and expense by taking some of that money yourself? It’s known as “cash for keys”. It sounds a little greedy, but greasing the wheels does help everything to run smooth. Plus, you can help out the bank and the buyers by not abandoning the house to squatters before they’re ready to take possession.
4) Rent it back. It may sound crazy, but some banks are willing to take on previous homeowners as tenants in their property. That’s only a short-term fix, as they’ll want your agreement to vacate the premises as soon as they find someone to purchase the property. In some cases, we can even purchase the property and rent it back to you.
It’s really good that you’re reading this page and exploring your options. We help homeowners like you to find creative solutions.