Help for Homeowners in Pre-foreclosure
Foreclosure is a scary word. Nobody gets to that point because they want to. But sometimes things go wrong. In Florida, before you have to worry about foreclosure, there is a pre-foreclosure process. When you’re in pre-foreclosure, you still have solutions available that can help you keep the house and/or settle the debt. If you decide to sell your house to settle the debt, Real Options and Investments can help.
Pre-foreclosure in Florida
Pre-foreclosure refers to the period when payments are late, but foreclosure hasn’t formally begun. In this stage, you should get notices that you are behind in your payments. You might also be charged late fees and potentially other fees.
In Florida, during pre-foreclosure, the lender has to send a breach letter before they can start the formal foreclosure process.
The breach letter is important because it clearly states the conditions of the loan, the amount owed, the amount that is late, options to fix the problem, the timeline for moving forward, and other important details. If you have a late payment but have not received a breach letter, you can be considered in pre-foreclosure. Everything below is intended to provide options for you and help you out of a tough situation.
Talk to the Lender
All foreclosures in Florida are judicial. That means the lender has to take you to court in order to foreclose on the house. Nobody wants to do this. It’s an arduous process, and it’s expensive. Most lenders would rather work with you to find a payment plan that doesn’t require foreclosure.
The first step is always to talk to the lender and see what options are available. They might be willing to modify the loan. This is where the monthly payments are changed, and often the duration of the loan is extended to make up the difference.
The lender could also work with you on a payment plan that helps you keep up without ultimately modifying the loan.
Most lenders will at least try to work with you. There are no guarantees that you will reach a good agreement, but the worst thing they can do at this point is leave things as they already are. You are not in foreclosure yet.
Try to Catch Up
This is easier said than done, but you have the legal right to catch up on your mortgage. If you do so before a court rules on foreclosure, then you keep the house, and the conditions of the original loan stand.
Granted, people fall behind on their mortgage payments because money is tight, but there are always options to explore to try to make a few extra dollars, especially if you aren’t too far off from keeping up with the payments. A second source of income, a side hustle, the sale of other property, crowdsourcing, or a number of other options can all help you get out from behind the mortgage payments.
Sell the House
If you can’t negotiate the loan, and you can’t get additional money, your options are limited. You can let the lender take you to court and foreclose on the house, or you can try to sell it. In most cases, you can sell a house for enough to settle the loan and have money left over.
Even when that isn’t the case, you can explore the idea of a short sale with the lender. This is where you sell the house, and they keep all the proceeds from the sale. But if the sale proceeds don’t cover the full amount of the remaining loan, they just forgive the debt and let you on your way. It’s not ideal, but it does prevent you from having a foreclosure on your credit history. The truth is that most people who head into foreclosure get out of it by selling their house. You have a lot of options, and if you need to sell your house fast, Real Options & Investments can help. We buy houses for cash in the Fort Myers area, and we can close on your house in as few as two days. Contact us today. We will give you a no-commitment cash offer, and you can explore real solutions to your problem.