Help For Austin Homeowners in Pre-Foreclosure

There are numerous possible causes that one might experience leading to an unforeseen lapse of income. For example, if, for whatever reason, you have not been paying your mortgage, the foreclosure process may have already started. Many homeowners who call us want to sell an Austin home for cash, We Buy Austin Houses is happy to help in such cases. Quite often, because the pre-foreclosure process has begun when we first hear from a home owner, time is of the essence. Within 120 days of being late on your mortgage payment, banks have the right to begin the pre-foreclosure process. According to a recent article, there are currently 215,495 properties in pre-foreclosure in the U.S. (Vacant Zombie Properties Decline, Yahoo News. Sep. 7, 2021). If this is currently you, you are not alone. If you have found yourself in this situation, it is extremely important to resolve it quickly.

What happens?

If you are in pre-foreclosure, the bank is starting to move the process toward foreclosure and there are a couple of steps you might consider taking

First, prepare for a significant decrease in your credit score. This is because once your payments are reported as late, your bank will decide that you are not paying your debts as agreed. Having a lower credit score will make it increasingly difficult to get loans and credit accounts in the future. If the foreclosure becomes finalized, you should expect another significant decrease in your score. Because banks and credit card companies use your credit score and credit history to determine the amount of risk that is associated with loaning to you, foreclosure will significantly impact your financial future, as you will likely be labeled as a high-risk borrower.

The bank will begin taking actions to try and collect the debt owed. You can expect to be bombarded with multiple calls, text messages, emails, or written correspondence regarding what you owe them.

Finally, if collection attempts yield no results, the bank will most likely post a foreclosure notice on your door, and provide you with a time-frame in which they expect you to be completely moved out of your home.

How and When Does the Foreclosure Occur?

The foreclosure will occur in a way that is disclosed in your agreement with your mortgage provider. 

Some companies include a clause dealing with foreclosure in the original paperwork. In this clause, it will clearly state that they have the right to sell your house to someone else or sell it at auction. If the house is sold at auction, and someone purchases it, ownership of the property transfers to them. This is a method often used by banks in order to avoid having to go to court for an order of foreclosure.

In the event that there is no clause in the promissory note or original loan documents, the mortgage company will then go to court to receive an order of foreclosure. All hope is not lost at this point! Until it has sold, it is still possible to recover your home. However, once the property is sold, you’ll need to repurchase it if you want to recover it.

Pre-foreclosure is stressful. Not only is it stressful, but it is harmful as well. Your credit score is inevitably going to be affected, but if you act fast, you may be able to avoid foreclosure. We are here to help. 

How Can Foreclosure be Avoided?

Pre-foreclosure is not the end. There are things you can do, but the worst thing you can do is to just let it happen. Many people get scared when foreclosure seems as if it is inevitable because they aren’t sure what to do. At this stage, it is best to come to an agreement with your bank, or look at other alternatives and decide if you would like to sell your Austin house quickly to We Buy Austin Houses.

-Talk to your bank. If this is the first time you have been late, it is possible to restructure your loan to ensure those late payments become a thing of the past, and get you back on track.

-Ask for a short sale. A short sale is a way to sell your home for less than you owe. If you do that you will be able to walk away from the amount you owe, but keep in mind, there is a good chance this will involve paying extra taxes.

-File for bankruptcy. If you find yourself continuously late or unable to pay debts, bankruptcy may be the best option for you. Debts can include (but are not limited to): auto loans, credit card accounts, utility payments etc. This also resolves other non-federal debts. Taking this step comes with lasting effects. Bankruptcies typically -depending on the type- could potentially stay on your credit report between 3-10 years. This causes a lasting negative effect on your credit score, and therefore should be used as a last resort.

-Pay off the debt. Paying off the debt is an option. Depending on the amount, however, this may or may not be possible for you. Usually, if you had the ability to pay off a debt, there is a good chance you wouldn’t have gotten to the point of pre-foreclosure. 

-Sell your home. Although the previous options may solve some of your problems partially, they all come with their downsides. Selling your home remains the best option. Selling your home will allow you to bypass foreclosure all together, and possibly even leave you with some extra money in your pocket. We Buy Austin Houses will buy your Austin home for cash and help you avoid foreclosure. 

Remember, foreclosure can be avoided. That’s what We Buy Austin Houses specializes in! Not only do we give you cash for your property, but we get it to you quickly! We are here to help, please don’t hesitate to give us a  call today at 512-598-9341 or visit our website for more details!