Foreclosure - Know Your Options!
Review your options here and get the help you need

Don't be ashamed that your lender wants to foreclose on you. There are over 2000 foreclosure notices every month in Maricopa county. Life puts us in bad circumstances at times.

But you do need to decide what you want to do and if you are concerned about your credit. You have 3 basic options that are detailed below. Each option may have several solutions. Click more... for more details on each solution.

Your Options:

Option #1 : Save your house and stay in it
Your action	Affect on credit	Affect on You
- Make up the back payments and bring the loan current. more...	Late payments	Stay in house
- Complete a workout program with your lender. more...	Late payments	Stay in house
- Refinance for easier payments. more...	Late payments	Stay in house
- File for bankruptcy. more...	Late payments and Bankruptcy	Stay in house a little longer

Option #2 : Sell your house and save your credit
Your action	Affect on credit	Affect on You
- Sell through a realtor. more...	Late payments	You move
- Sell on your own FSBO. more...	Late payments	You move
- Give the house back to the lender. more...	Late payments	You move
- Sell to an investor. more...	Late payments and Bankruptcy	You move

Option #3 : Lose your house to foreclosure
No action	Affect on credit	Affect on You
- Do nothing and your house sells at auction. more...	Foreclosure on your record	You lose your house

Details

Make up the back payments and bring the loan current
There are many ways to bring your loan current. This option is good if your circumstances have changed and you can now afford to make the payments. How: You will need to borrow the money. Credit: Your credit will still show some late payments but that isn't too bad. Equity: Your equity is saved if you have any. Help: Comes from family, friends or any other way you can secure a loan. Where you live: You stay in your own house.
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Complete a workout program with your lender
Your lender does not want to foreclose on your house and is willing to try various remedies to keep you in your house. They have programs that will take your back payments and put them at the tail end of your loan, or spread them over many payments, or even reschedule your loan with the back payments added in. This option is good if your circumstances have changed and you can now afford to make the payments. How: You need to contact your lender and find out what kinds of workout programs they have and how to initiate them. Credit: Your credit will still show some late payments but that isn't too bad. Equity: Your equity is saved if you have any. Help: Comes by way of the lenders workout plan. Where you live: You stay in your own house.
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Refinance for easier payments
If your finances are such that you can qualify to refinance the loan and you either have equity or you can get a lower interest rate, you may be able to lower you monthly payment. This option is good if your circumstances have changed and you can afford to get by with the new loan payment amount. How: Contact a mortgage broker, bank or even your current lender to determine if you can qualify for a refinance loan. Credit: Your credit will still show some late payments but that isn't too bad. Equity: If you pull cash out of the refinance, you will eat up your equity which is not recommended. If you have equity to take out, take as little as possible. Help: Comes by way of reducing your monthly payment. Where you live: You stay in your own house.
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File for bankruptcy
Filing for bankruptcy will stall a foreclosure process. However it will only delay it for some period of time and you risk having a bankruptcy on your credit as well as a foreclosure. Don't do it if you don't have to. Consider the Investor option instead. How: Contact a bankruptcy attorney. Credit: Your credit will show some late payments, possibly a foreclosure AND a bankruptcy. This will affect you and your credit for a long time. Avoid it if at all possible. Equity: If you lose your house anyway, your equity will be gone unless the bankruptcy sold your house and has something left over after paying off all your creditors. In which case you would get your remaining equity as cash. Help: If you cancel the bankruptcy before it goes through, you will have gained some time. This isn't any good unless you can get things under control during that time. Where you live: You can lose your house or buy yourself some time to get things under control and possible save the house.
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Sell through a realtor
Selling through a realtor will take a lot of time. In Arizona the foreclosure process only takes 3 months and while you can sell your house in that amount of time, it's unlikely as it has to be listed, shown, gotten under contract and the eventual buyer has to obtain financing. These all take time. You must have enough equity to cover the costs associated with selling as well, including closing costs and realtors commissions. This can be up to 10% of the value of your house. If you are running out of time, consider the Investor option. How: Contact a real estate agent. Credit: Your credit will still show some late payments but that isn't too bad. Equity: If you have any equity left after the house sells you will get it in cash. Help: Selling the house will pay of your loan and late payments. Where you live: You will have to find a new place to live.
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Sell on your own FSBO (For Sale By Owner)
Selling on your own can be a good way to go. You need to get the house in good enough shape to show it. You will need a FSBO sign and it will cost you some money to put an ad in the paper. You can save most all closing costs and you will pay no commissions. A title company may be able to help you prepare contracts and other paperwork. This option will still take some time so start right away. If you are running out of time, consider the Investor option. How: Contact a real estate agent. Credit: Your credit will still show some late payments but that isn't too bad. Equity: If you have any equity left after the house sells you will get it in cash. Help: Selling the house will pay of your loan and late payments. Where you live: You will have to find a new place to live.
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Give the house back to the lender
Some lenders will let you just give the house back to them. Sometimes this is called "Deed in lieu of foreclosure". Check with your lender for this option and find out if it will affect your credit in any way. Consider the Investor option because you might be able to get money out selling it to the investor. How: Contact your lender for this type of program. Credit: Your credit will still show some late payments but that isn't too bad. Make sure the lender won't add other negative items to your credit report Equity: It's not likely you have any equity if your considering this option. Help: Relieves you from any more payments. Where you live: You will have to find a new place to live.
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Do nothing and your house sells at auction
If you don't attempt to keep your house or sell it in some way, your house will be sold by auction on the auction date. If you are still in the house you will receive an eviction notice and if you don't leave you will be physically removed from the house by the sherrif of other law enforcement. How: By doing nothing to save the situation. Credit: Your credit will show late payments and a foreclosure which will affect your life for many years to come. Equity: If the house sells at auction for enough to pay off the lender and any other liens against the house, you will receive the extra money in cash. This rarely if ever happens. Help: None. Where you live: You will have to find a new place to live.
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Sell to an investor
There is a lot to be said about investors, both good and bad. I will try to give you both sides fairly. Here is the focus of an investor: Buy your house from you with little or no money out of their pockets, at least up front money. Buy your house with as much equity as possible. They might sell your house to someone else as fast as possible. They might rent or lease your house to someone for a long period of time. The good thing about selling to an investor is that you can sell your house fast. They will often make up your back payments and bring your loan current saving your credit from continueing to get worse. In fact, what they really want to do is to have you sign the deed to your house over to them, making them the owner of the house now, but for the loan to stay in your name. This is where it can be a good thing or a bad thing. If they are a good investor, they will make all your loan payments for you and you will be getting credit for all those payments made until the loan is paid off. For many people in foreclosure that is like a godsend. You get rid of your problem and someone else is making your credit better. If it is a bad investor, they may not be able to come through with the payments after some period of time and your loan goes in to default again and you are still on the hook for it. This is a decision you have to make. You may want to ask the investor about how many houses they have bought and sold and you may even be able to get testimonials from the investors past deals. Whether or not you can get any money out of selling your house depends on how much equity you have. Remember, if you sold through a realtor you will give up almost 10% of the sale price in commissions and closing costs. So you shouldn't expect an investor to offer you more than 90% of your houses value, and that's if it's in ready-to-sell shape. Do expect them to try to buy it from you for as little as they can. If you have more equity than that, negotiate with the investor to keep as much equity as you can. It is easier for the investor to give you as little up front as possible but you can work with them to get the rest of your negotiated equity when the loan is paid off or in installments. Remember, that could take a long time so put a time frame on it. Maybe up to 4-5 years max. Remember, investors will contact you whether they are experienced or not. You will want to somehow make sure they either have lots of experience or have the financial ability to handle the deal. Many are new investors trying to buy houses without any of their own money because they are just as broke as you are. Make sure they have the means to carry through with whatever deal you strike. There are a lot of creative ways to put together a real estate deal. You want to let the investor know what you really need out of the deal and when you need it. Remember that they need to make a profit too or they won't be interested in buying your house at all. Even if there is no equity or your are even upside down on the house, an investor may still be able to work with the bank to buy your house at a discount. You have nothing to lose here as it may cure your foreclosure. You won't get much money but you will save your credit. Why do I tell you all this? Guess what, I'm an investor! I'm one of the good ones. I have great credit and the financial means to carry through with any deal I take on. I am just one person and not a big corporation so I can only buy so many houses at a time. However, I am in contact with lots of other investors that I can pass your situtation on to. I don't like to see people lose their houses and their credit. I will do whatever I can to help you but I'm not pushy. I'll even give you free advice if that's all you want. If you decide you want to sell to an investor quickly, I would like to talk to you first and see if we can help each other. I do make extra money in real estate but I'm not rich and still work a day job like everybody else. But I still usually answer my cell phone at any time, but I might ask to call you back after work. If I don't answer, leave a message and I'll call you back as quick as I can. Joel Nelson Chronos Properties LLC 602-739-4336 personal cell phone JNelson@chronosrealty.com You can also send me your property information from the 'Sellers' section of my web site at www.ChronosRealty.com How: Contact your lender for this type of program. Credit: Your credit will still show some late payments but that isn't too bad. Make sure the lender won't add other negative items to your credit report Equity: It's not likely you have any equity if your considering this option. Help: Relieves you from any more payments. Where you live: You will have to find a new place to live.
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