Even with the economy on the upswing currently, there are still millions of homeowners finding themselves in pre-foreclosure. And while this is a serious matter, once a homeowner has a better understanding of the process, it isn’t as frightening as it sounds – although, still serious and needs to be addressed. Ignoring it won’t make it go away.
What Is Pre-Foreclosure in Denver Anyway?
As we’ve already stated, the economy is on the upswing, but many homeowners in Denver and across the country are still reeling for the struggles of the years before. Making that monthly mortgage along with everything else has gotten impossible and getting “caught up” isn’t happening as fast as the mortgage companies require.
It only takes missing 3 to 6 mortgage payments to get a notice of looming foreclosure in their near future from the bank. But it can take 6 months or more to get balanced out and back on track in Denver, CO and longer in other areas of the country.
That letter you get from your lender is called “pre-foreclosure” and it is their ‘warning shot’, or the proper referenced is “Notice of Default”. Meaning, you have a certain amount of time to get a certain amount of money to them before they begin the actual foreclosure process. Most lenders will let a homeowner miss 3 months of payments before they issue this warning shot.
If you’re in that situation currently, or have been in the past, you know that the chances of you getting 3 months or more of mortgage payments together before that deadline probably isn’t going to happen. So, if you fail at meeting their demands stated in that warning shot, the lender will foreclose, they assume ownership and you’ll be evicted.
On the upside to this situation, at this stage of the process, you still have an opportunity to save your home, even if you can’t produce the full amount being demanded by the lender.
Your Pre-foreclosure Options
So, you are behind on your mortgage payments and you have received that “notice of default” or warning shot from your mortgage lender. The document probably advised you that you have 90 to 180 days to take care of this matter. Keep calm – panic is not going to help!
You still have a few options that could help you keep your home, or at least, delay the process:
- If you have equity in your mortgage, referred to as being “above water,” refinancing your outstanding mortgage balance maybe possible. This would lower your monthly payments too. Call a Denver, CO lender and inquire if this option is available to you. Or, give Property Scouts a call and tell us about your situation. We have connections with reputable lenders and will be glad to refer you to one.
- Another option is do a quick sell of our home. Property Scouts is one of several reputable Denver investors that will pay cash for houses like yours. In some cases, we have been able to work with lenders and get the back payments forgiven, possibly tacked on to the end of the mortgage note and the homeowner is starting out fresh, somewhat.
- Call your lender and ask their permission to place the house on the market as a short sale. This is the same process as placing your house on the market in normal situations, but at a lower price than the market value. The full amount you get from a short sale will go to the bank and they write the rest of mortgage off as a loss for them.
- Contact an attorney about declaring bankruptcy. This isn’t the most favorite option, because it will stay on your credit for years, and create more damage. But it will buy you time to repay your debts and get a fresh start.
The financial woes and struggles of making mortgage payments aren’t anything that lenders in Denver or anywhere in the country aren’t aware of already. A phone call from you won’t be the first and many have plans in place to help their customers in this position. Remember – they don’t want your house! That’s not how they make their money.
With clear and honest communication with your lender, you will find out that they will work with you, allowing you to stay in your house if possible. Or, help you save your credit and give you more time to move without being under duress of the Sheriff’s office being at your door one morning.
Foreclosures Put A Negative Mark On Your Credit For Years
Your credit score will be affective negatively by a foreclosure 200 to 400 points. This can keep you from getting any type of loan for 5 to 7 years, get you rejections from leases, your auto insurance will increase, and so much more.
The first thing to do when you receive that Notice of Default is not to panic and then be dutiful and contact your lender. And if a solution is still not possible from your lender, give Property Scouts a call. We may be able to help you out of this situation with little to no damage.
We Have Ways To Help You With Pre-Foreclosure
- We can possibly help with a short sale – Simply provide us the details on our website form or give us a call. We will evaluate your situation and let you know if we can help and how.
- We can buy your Denver house – We pay cash for Denver houses every day and we will make you an all-cash offer too. Complete this form today and let’s get started >>
- Call us with your concerns and questions and we will provide you guidance for FREE, providing you resources that will enable you to make a well-educated decision. This won’t cost you anything, and there is catch, no obligation.
If you are in the pre-foreclosure stage, or as we call it, the warning shot has been issued, you still have time to fix the situation. Call your lender and see if they are willing to work with you. And if they’re not, contact us and we’ll discuss your situation and give you our advice.