How To Stop And Avoid Foreclosure in Madison WI
The foreclosure process in Madison Wisconsin can be very difficult. This guide is aimed to help you work through the foreclosure process, learn about all of your options, find the best solution for you and your family and take control of your foreclosure situation.
The housing crisis that emerged in 2007 and ended in 2009 spurred an economic downturn that increased job unemployment and forced millions of homeowners to go through the foreclosure process.
When a homeowner is unable to make a mortgage payment. Whether from job loss, decreased income, divorce or any similiar reason, banks and lenders will become suspicious. We understand that no homeowner ever plans on going through the foreclosure process when they purchase their home. We want to make you aware that there are a ways to stop the foreclosure process or avoid it if you have not yet entered the proceedings.
The idea of going through this process can be very stressful and humiliating but if you educate yourself on the options, you may not have to experience the negative effects of a foreclosure on your record.
The key to slowing down this process is taking action immediately. The longer you wait to take action, the less chance you will have to receive help.
USA.gov | Foreclosure Information | Avoid Foreclosure | Foreclosure Scams - USA.gov is an online guide to government resources and information. They provide detailed information on the foreclosure process and steps to take to control the effects.
HUD.gov | Foreclosure Resources | Avoiding Foreclosure - HUD is the US department of Housing and Urban Development. They have several resources on their site to direct you in the best direction depending on where you are in the foreclosure process.
Foreclosure Prevention Assistance | NY State Attorney General - This brochure discusses warning signs and first steps of action to take pertaining to foreclosure. They give you several contact references to contact to discuss your specific situation.
Take Action - Call Your Lender
Homeowners default on their mortgages for a number of reasons. When dealing with mortgage lenders there main goal is to protect their
investment. Even though, they do not want to initiate the foreclosure process, sometimes they are left with no other options.
Once you figure out that you are unable to make your mortgage payment, your first step needs to be to contact your lender immediately.
The longer you procrastinate the less likely you will be able to protect your home and be able to avoid foreclosure. One missed payment will initiate a red flag to your lender that there may be a problem.
Here are 5 strategies your lender will propose to you:
1) Repayment Plan - Your lender will add a small amount to your monthly payments for a specified period of time until the amount of missed payments have been collected.
2) Special Forebearance - In this situation, your lender will be able arrange a repayment plan based on your current financial situation. They may also provide a temporary reduction or suspension in your payments to allow you to recover from the situation that caused you to miss your mortgage payments.
3) Mortgage Modification - Your lender may allow you to refinance your debt or possibly extend the term of your loan. This will create a situation where you will have lower monthly payments and may allow you to stay current on your loan. This would be a good solution for a homeowner who experienced a salary reduction or demotion.
4) Partial Claim - Your lender may allow you to use certain government loans to pay back missed mortgage payments. Your loan has to be atleast 4 months delinquent but no more than 12. You have to also be able to continue to make full mortgage payments from the time the claim is issued.
5) Debt Forgiveness - You will come up with a plan to become current on your loan after your missed payments. Your lender will review your plan and may possibly forgive or waive your missed payments. This strategy is rarely implemented but is a possibility.
You Can Stop The Foreclosure Process By Selling
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Understanding How The Foreclosure Process Works in Madison WI
If you are reading this, I imagine that you have already done a good amount of research on this topic. If you are familiar with how the foreclosure process works, you can skip ahead to the next section. With that being said, we want to make sure we touch on all premises to make you aware of all of your options. The more you know about the foreclosure process, the better chance you will have of stopping or avoiding it all together.
Preforeclosure Process - This is the beginning of the process, usually the period after a homeowner goes into default (payment is 90+ days past due). During this period of time you should be taking the proper precautions to set yourself up not to have to enter foreclosure. This is the time when you should be contacting your lender and going over options that may work for your specific situation. Some other options would be:
Sell your house through a real estate agency/brokerage
Sell your house to a local real estate investment firm
This initial stage is when you will have the most options to retain your home or sell your property to avoid damage to your credit.
When you become 90+ days past due on your mortgage, your lender will most likely issue a Notice of Default. This is a public record filing that indicates your homes location and that you are late on your payments. This is the first step of the foreclosure process that the banks take.
Each state has different requirements for when a Notice of Default is filed. In New York, you will most likely recieve this notification any where from 60- 90 days+. Once you recieve this default notification, you are still in a good position to discuss your options with your lender to make up payments or turn to another resolution.
However this notice of default does trigger the foreclosure process in Madison WI. Lenders will now begin the wait to sell or auction your property. New York has one of longest holding periods for banks to begin selling foreclosed properties. This is why in 2016, you are seeing a consistent amount of foreclosures still hitting the market.
Once the home reaches the point where the lenders decide to sell or auction the property, your lender will typically put a notice in the paper stating the property will be available for sale or auction. The previous tenants will then be required to move out of the property unless a rental agreement was agreed upon prior to the sale.
This is why it is extremely important to take action as soon as you are aware you may become delinquent on your payments. The foreclosure process has the ability to move fast and the more payments you miss the harder it will be for you to recover. Do not be humiliated, there are some things in life we can't control. Take the initiative and contact your lender and discuss your options. Lenders will be more than happy to work with you, if you work with them. It is hard to believe but lenders do not want to have to foreclose on homes. It is very costly and expensive for them to do so.
How To Stop Foreclosure In Madison WI
In the event that your lender is unwilling to work with you to avoid the foreclosure process, there are still steps you can take to stop foreclosure. A homeowner will have to take immediete action during this point of the process. Do not think that the lose of your home is inevitable, you still have time and still have options, but you must act quickly.
Here are 5 ways to stop the foreclosure process:
1) Foreclosure Negotiation - You have time prior to a scheduled date for your home to be auctioned off to negotiate a deal with your lender. As we touched on before, your lender would much rather be able to come to a compromise with the homeowner. Understand the process and approach your lender with a plan on how you will get back on track with your mortgage payments.
2) Sell Your Home - During this point in the process, our main goal is avoiding the big credit hit from defaulting on your loan and being foreclosed on by your lender. If you want to try to sell your house, speak with an experienced real estate agent in your area. They will give you a comparable market analysis on your home, so you can better understand what you can sell your property for. If you decide to go this route, make sure you do your research. Get referrals and make sure the agent you hire understands the current housing market and has had success marketing homes in your area. The sale of your home is now urgent. If you have a large amount of equity in your home, you can contact a real estate investment firm and sell your home at a discount.
3) Short Sale - If your home is worth less than what you on the loan (in other words, your underwater), you may be a possible cadidate for a short sale. After your lender files a Notice of Default and before your home goes to auction, your lender must consider a short sale. This means your lender must consider a sale for less than you owe on the loan. If you present your lender with a reasonable short sale offer, it is something they will deffinitly consider. You will be saving the lender time and money because they are going to turn around and sell the property anyways. So if you decided to sell your home, continue to shop for buyers even if the foreclosure process has been initiated.
4) Deed-In-Lieu of Foreclosure - This "last resort" strategy will allow you to give your property back to your lender. This situation will not save your house or allow you to continue living there but you will prevent damage to your credit score. You will be able to qualify for this option if:
Your attempts at selling your home prior to foreclosure were unsucessful
You have no further mortgages in default
You are currently behind on payments and have no other option
5) Bankruptcy - Filing for bankruptcy will stop foreclosure dead in its tracks. Once a bankruptcy petition is filed, by law, all collections from your lender will be discountinued. The day that your lender becomes aware of your bankruptcy petition, the foreclosure process will be put a halt. Here is the catch. Bankruptcy truly just buys you time to replace your lost job or recover from your financial situation. The law will require that your mortgage company work in good faith to try and come up with a repayment plan to get you back on track. If you think this strategy may work for you, be sure to contact a bankruptcy attorney to discuss your specific situation.
In a situation that your lender will not work with you, your options do become a bit more limited but remember you are not hopeless. There are still ways to stop the foreclosure process and save your credit rating, relieve your stress and save you money.
Resources To Help With The Foreclosure Process
No matter where you live, you need to take advantage of local experts in your area. These local experts can help you determine the best course of action for you and your family. Here are a couple resources that you should pursue locally to help you with the foreclosure process.
1) Real Estate Attorney - They will help evaluate your situation and give you further options to consider. They will also make sure state and local laws allow for your actions. Each foreclosure case is different and complicated issues can determine which route you choose. This article will help you better choose when and if you need to hire an attorney.
2) Real Estate Agent - The foreclosure process is very complicated, so make sure you work with an agent who is familiar with how it works. You want to work with a real estate agent who has the capability of of working through short sales and has worked with homeowners in your position. So choose wisely when it comes to hiring a real estate agent to work with.
3) Real Estate Investment Firm - The same issues apply when speaking to real estate investment firms who purchase homes in cash or can work lease options, sub 2's or wraps. Make sure the firm you are working with is honest, reliable and understands the foreclosure process. These companies typically will not charge you fees and if they have worked through these situations in the past, may be your best bet.
The key point we want you to understand when you are trying to avoid the foreclosure process is to take the initiative and take action. Make as many phone calls as possible to better undertstand your options. Use all of your local resources and discuss your situation with them early on in the process. Remember the sooner you act, the better chance you have of avoiding or stopping forclosure.
Final Remarks on The Foreclosure Process
This process can become very stressful for you and your family. We cannot reiterate enough how important it is to act promptly as soon as you understand you may have to default on your mortgage payments. We have laid the groundwork for you to educate yourself on your current situation, but just reading this article is not enough. Do your research and find local experts who have worked in this niche and have been successful. Consult with these people, they will be more than willing to assist you through the process.
Our company, Copper Lakes Capital has worked with several homeowners who have found themselves in this same situation. Our main goal is to find you the best solution to resolve your current circumstances. We want to help you avoid foreclosure, save your credit or help you sell your home. Our company does not charge any fees when working with foreclosure customers and truly work in your best interest.
Contact us anytime to get an unbiased opinion on your current situation. We would love to walk you through your options and guide you in the best possible direction for you and your family.
You can simply fill out this form or give us a call at (315)516-8023.