With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
What is a Preforeclosure in Michigan?
Many homeowners across America and Macomb County, Michigan 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 as a Borrower
If you’re behind on mortgage payments, you’re likely to receive a foreclosure 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.
- You may be able to quickly sell your home to a real estate investor. You can then use the cash to pay the months of back-payments owed. There are also some instances where we can negotiate with the lender on your behalf to accept a lower payoff based on the sale price.
- 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 not interested in owning a lot of real estate. 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 100+ points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very cautious if you’ve received a Notice of Default from your lender.
Working with a We Buy Houses Company In Preforeclosure in Michigan
Cash for houses companies like ours deal with foreclosure situations often. Thankfully, we can provide some relief during a stressful time for a lot of sellers.
- We can potentially help with a short sale: Contact us via our form and we may be able to work with you and your lender to buy your house and pay off the balance of your loan.
- We can buy your house: If you aren’t underwater, we can also buy your property as-is. you may not have the time or extra cash to complete a lot of big repairs. This is no problem when selling to us. We’ll buy your house no matter the condition.
- 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 resources.