While no homeowner wants to lose their home, any number of factors can lead to the possibility of foreclosure. In 2020, more than 1 in 100 homes were facing foreclosure. But in 2018, nearly 1 in 10 homeowners believed it was a possibility for them.
When a homeowner falls behind on their mortgage payments for an extended period, for whatever reason, their lender may choose to foreclose on the property. Foreclosure is a legal remedy that allows the lender to reclaim what you owe on the mortgage.
If you’re considering the possibility that you may fall behind on your mortgage in the future, or if you’re facing imminent foreclosure, you may still have options. In some cases, you may be able to keep your home or sell it to a buyer before the bank initiates foreclosure proceedings.
Several options can help you in selling your home to avoid foreclosure in New Hampshire. Wherever you are in the foreclosure process, you may be able to recoup some of your investment in your home. Read on to learn more about the legal process of foreclosure, as well as ways to sell your home and stop foreclosure altogether.
The Pre-Foreclosure and Foreclosure Process
“Pre-foreclosure” refers to the period between a homeowner’s default and the filing of a foreclosure complaint. When a homeowner falls behind on their mortgage payments for a certain period, usually three months, the lender considers them to be in “default.”
At this time, the lender is typically willing to work with the homeowner to help them get current with their payments. However, if the homeowner doesn’t respond to the lender or continues to miss payments, the lender will issue a Notice of Default. This Notice is a formal indication that the lender intends to use the courts to force payment of the mortgage.
If the homeowner continues to miss payments at this point, the lender will file a complaint about foreclosure with the county court. Through a series of motions by the lender’s attorney and orders from the judge assigned to the case, the lender will:
- reclaim ownership of the home
- sell the home
- remove the homeowner through eviction, and
- use the proceeds to pay itself back for the debt.
Advice for Avoiding Foreclosure on Your Home
While foreclosure could happen to anyone and is no reason for shame, it is an aggressive legal remedy you should take the process very seriously. While any missed payments can affect your credit score, a foreclosure on your credit report often has a dramatic impact.
You have options to avoid this, however. If you act quickly in the pre-foreclosure process, you may be able to stay in your home altogether. Even if that’s not possible, you may be able to sell your home and walk away with a bit of money in your pocket instead of a civil case against you.
If your lender hasn’t filed a civil case against you, they will likely work with you to avoid foreclosing on your home. It’s essential to work with them quickly, as your options become more limited once the lender has filed a foreclosure case against you.
Selling Your House After Foreclosure Begins
Can you still sell your home if the lender has filed for a foreclosure? Yes! At the end of the foreclosure process, the lender will sell the house to the highest bidder at a foreclosure sale. Until this sale happens, you are entitled to sell your home and pay the lender back yourself.
If your home is worth as much as you owe or more, a real estate agent can help you sell your home for the best possible price. Most real estate agents charge a fee (usually a percentage of the home’s sale price) but attract and negotiate with buyers for you. Real estate agents can also prepare you for hidden expenses such as closing costs that you might overlook yourself.
If there’s not enough wiggle room in the value of your home to pay a realtor, you can also sell your house on your own. While selling your home this way requires a lot more time and energy, but can save you a significant amount of money. There are even home buying companies that will give you a cash offer for your home if you’re eligible. We buy houses, New Hampshire!
Consider a Short Sale
If you’re unable to modify your mortgage and owe more than it’s worth, your lender may allow you to sell your home for less than you owe. This option called a “short sale,” will reduce some of the negative consequences of a completed foreclosure. While you may still have to pay some of the balance of the debt yourself, your lender may offer you a “deficiency waiver,” letting you walk away debt-free.
Applying for Forbearance
If you’re experiencing a temporary financial hardship, your lender may allow you to pause or reduce your mortgage payments temporarily. This option, called “forbearance,” may enable you to stay in your home if you contact your lender early in the foreclosure process.
Even if approved, a forbearance doesn’t eliminate your responsibility for the missed or reduced payments, though. You’ll still have to pay the same amount over the life of your mortgage, and interest will continue to accrue. But if you expect to be able to pay your mortgage soon, this is a great option.
Restructuring Your Mortgage Loan
You may be eligible for a loan modification, which adjusts the terms of your mortgage between you and your lender to help you get back on track. By lowering your payments, extending the life of your loan, reducing the interest rate, or some combination of the three, your lender makes your home more affordable to you.
If you’re unable or unwilling to get current on your debt, your lender may offer you an option called “deed in lieu of foreclosure.” This is legalese for “give us the property without any fuss, and we’ll call it even.” This option can spare you some of the credit score damage you would experience with a foreclosure, and your lender may even offer you moving assistance. [ words]
Selling Your House Fast for Cash in NH
Your best bet, in almost all cases, is to get a cash offer for your home. Lenders are more likely to accept less money if that money is in the form of cash. There are companies that buy houses in Bedford. If you’re trying to find the best home buying company in your area, you can run an internet search for “buy my home Concord” (or any other city).
Foreclosure is usually a last resort option for lenders, but there may still be options available to you. Some of them can make it possible for you to keep your home, recoup some of your investment, or reduce the hit to your credit score. If you’re facing the possibility of foreclosure, talk with your lender as soon as possible.
While you may not be able to stay in your home or even want to, it is worth exploring options to avoid foreclosure. Your lender also wants to avoid the expensive foreclosure process, so work with them to develop an agreement that benefits both of you.