If you’re facing a foreclosure, rest assured, you have options to stop it before it’s too late. In this article, we’ll highlight the foreclosure timeline and a few ways you can stop a foreclosure sale without ruining your credit or further adding debt to your plate. Let’s dive in!
Understanding the Foreclosure Timeline
The foreclosure process can vary from state to state and even lender to lender, however, to keep things as simple as possible, we’ve broken the timeline into three digestible sections.
1. Pre–Foreclosure (Default Notice)
The first step in the foreclosure process typically involves a default notice. A default notice is a notice from the lender that you haven’t paid your mortgage regularly (you haven’t paid your mortgage as promised).
It’s important to note that once a default notice has been issued to the borrower, it’s not too late to stop a foreclosure sale.
The default notice will likely include a few options for the borrower to consider to avoid a foreclosure sale such as paying outstanding payments, forbearance payments, and more.
2. Foreclosure Auction (Sale Date)
After a default notice is served to the borrower, if the borrower is unable to come to an agreement with the lender, the lender will begin the auctioning process.
The foreclosure auction typically takes place through various real estate listing platforms such as Zillow, but may use private means to auction the property.
If you’re like many and you believe you’ve found a loop-hole to purchase the property from the lender during the auction, you might be correct, but it’s unlikely.
Many lenders place a soft “black list” of your name against the property to ensure that you cannot purchase the property during the auction – however, this typically only applies to a mortgage-based sale with a mortgage through the same lender – if you plan to pay cash or use another lender for your mortgage you might have luck purchasing the property during the auction. Before proceeding with this step, consider it as a last resort and first check your local and state-based laws to ensure that this is possible where you live. It’s also important to reach out to the lender to ensure you are allowed to purchase the property.
3. Post-Foreclosure (Ownership Transfer)
The final step in the foreclosure process is the ownership transfer. This step involves the transfer of ownership from the lender to the new owner – it’s self explanatory, really.
During the transfer of ownership, the sale can no-longer be stopped.
How to Stop a Foreclosure Sale
Now, as promised, we’ve got a few methods you can use to stop a foreclosure sale. Some of these options matter depending on your situation, and some may not be possible – that said, let’s dive in.
1. Forbearance
Remember the default notice? Once you’ve received this, the lender may offer the borrower a forbearance plan which highlights how they can avoid the foreclosure process, whether this be through a temporary payment arrangement with reduced payments, or a promise to pay by a specified date.
If the borrower has not received the default notice, it’s best to reach out to the lender and discuss a potential forbearance agreement – because once the foreclosure process starts, it’s much harder to stop a sale.
2. Refinancing
The next option is to simply refinance with another lender. If you’re behind on payments and have not received a default notice, it might not be too late to refinance with another lender. This step involves finding a mortgage company that will both pay the remaining balance of the mortgage and pay any outstanding fees from delayed/avoided payments.
This step is not for everyone, as many lenders will factor in payment history and will also likely require a downpayment to receive a new refinanced mortgage.
3. Selling Privately
In our third spot, we have selling the property privately.
Private sales, also known as traditional sales, is the process of selling a home through the standard real estate market.
When selling privately, you should know that there are two factors that can prevent you from avoiding foreclosure through private sales and these are:
Value must be equal to the mortgages payoff amount
The first downside to private sales is that the total including any commissions to realtors needs to be higher or equal to the mortgage’s payoff, including any fees from delayed/avoided payments.
Repairs are needed
Another downside is that the seller might be faced with contingencies such as specific repairs to the property, and chances are, if the seller is facing a foreclosure, money for repairs might be an issue.
4. Selling to Osborne Homes
Selling to Osborne Homes is best for anyone who cannot afford to make repairs on the home, doesn’t have time for negotiations and cannot sell for the mortgage’s payoff amount.
Osborne Homes is a cash home investor located in Fresno, California and purchases properties in California as-is (in any condition) and even properties that are currently being lived in, whether it be the seller or tenants.
Wondering how selling to Osborne Homes works? We’ve got you covered – it’s incredibly simple!
1. Reach Out
The first step is to simply reach out! During this step we’ll ask you about your property to help us determine a cash offer for your property. We’ll also collect information from you about your foreclosure situation.
2. Review Your Offer
Next, you’ll receive a no-pressure, no-obligation cash offer for your property. If you’re already in the process of foreclosure, we may offer a unique living arrangement agreement with you to ensure that you don’t lose your home immediately.
3. Close!
The final step is to simply close! We can close on any property in California within 7-14 days or on your timeline.
Stop a Foreclosure Sale with Osborne Homes Today
Ready to put the foreclosure troubles behind you? Our team of real-estate experts are on standby and are ready to purchase your home for all cash. Fill out this form to get started today!
