Avoid Foreclosure

The 4-Step foreclosure Process

Step 1 – Missed payments for a minimum of 3 months before starting the legal process of foreclosure

Step 2 – Notice of Default (NOD) recorded at County Recording Office as Public Record. Then you have a minimum of 90 Days before the Notice of Trustee Sale can be filed.

Step 3 – Notice of Trustee Sale recorded at County Recording Office as Public Record. Gives the homeowner the required 21 day minimum notice that the property will be sold at auction.

Step 4 – House sold at Auction to the highest bidder or thelendertakesownershipof the property. Homeowner required to vacate property.

Your 6 Options to Foreclosure

  1. Reinstate the Loan – Requires homeowner to pay all the missed payments and fees.
  2. ForbearanceAgreement – Work out a payment plan with the lender.
  3. Loan Modification – Change terms of the loan.
  4. Deed in Lieu of Foreclosure
  5. Cash for Keys Foreclosure (Can’t buy for 5-7 years)
  6. Sell Your Home/Short Sale (Can’t buy for 1-2 years)

Critical Foreclosure Due Diligence

  • SB1137 Senate Bill – Mortgage lenders need to follow certain procedures before issuing a Notice of Default (NOD)
  • Making Home Affordable (http://www.makinghomeaffordable.gov)
  • Tax Questions: Ask your tax professional about these forms and how they can affect you
    • 1099A
    • 1099C
    • Form 982
    • Insolvency Act
  • Foreclosure – 1099A = M9 Credit Rating
  • Short Sale – 1099C = Settlement of Debt

6 Documents Save You From Foreclosure

  1. 2 Years most recent Tax Returns (complete with ALL pages)
  2. 2 Months most recent Paystubs
  3. 2 Months most recent Bank Statements
  4. Most recent copy of Mortgage Statement(s)
  5. Hardship Letter (must be handwritten)
  6. Financial Information Statement
 

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