SvetLana Cole - Full Time Licensed broker with "Charles Rutenberg Realty"
3135 Book Rd, Naperville, IL 60564
“Equal Housing Opportunity”
CURE, MODIFICATION, and sometimes REDEMPTION, will allow you to stay in your home and stop home foreclosure.
SHORT SALE loses your home, but is better for your credit record.
BANKRUPTCY can delay the loss of your home, and eliminate some of your other debts, but is very bad for your credit record.
Doing NOTHING will cause you to lose your home in an unnecessarily short amount of time.
A foreclosure procedures against your home can be STOPPED in three cases only:
(It means a cure of your default) - This means making all of your late payments, plus whatever late fees and costs are due, including attorney fees and court costs.
There are time limits for this.
In Illinois for example, you only have 90 days to cure your default on your mortgage.
The 90 days starts to run when you are served with a summons in the foreclosure case. If you cure your default, your loan is reinstated.
The bank is not required to let you reinstate your loan if you already had a default and a cure recently.
A CURE will stop the foreclosure process against your home. The foreclosure case will be dropped and you can stay in your home, but you have to come up with potentially a lot of money, and fast.
If you have that kind of money you would not be in this mess in the first place, which is true for most people.
Commonly, but not always, banks will allow you to cure your default even when you are past the 90 day limit. The bank does not have to do this.
This means paying off the entire balance owed on the mortgage, including court costs, attorney fees, all late payments, and the entire amount owed.
For most people, this means selling the house in order to raise the money to pay off the mortgage.
Unfortunately, for a lot of people, their home is not worth enough money to pay off the mortgage.
Those people need to pay extra money when they sell their home, in order to redeem their mortgage.
The time limit for redemption is longer than the time limit for cure of your default. In Illinois for example, you have seven months in order to redeem your mortgage.
The time for redemption starts to run when you are served with a summons in the foreclosure case, which is the same trigger that starts the clock running for the 90-day right to cure. After the redemption period ends, the house may be sold at sheriff's sale, provided that other necessary conditions are met. Many people, when they learn that they have seven months, will relax and do nothing. BAD IDEA. After those seven months are gone, they will seem like a lot less than seven months, and you will be looking for help. You will get a lot more help if you ask for it at the beginning of the seven months. Everybody who begins working with us at the beginning is VERY happy about it by the time the seven months have elapsed.
3. LOAN MODIFICATION
"A Loan Modification - is a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford." (source: www.hud.gov)
Loan modifications can be negotiated by the owner himself or by a company the owner hires.
There are a lot of benefits to renegotiating your own loan:
Some people still hire companies to renegotiate their loan for them.
People who do not speak fluent English or do not have time might want to hire a negotiator.
Remember that not all loan modifications are successful.
If you make too much money, the bank might say that you can afford your loan without a modification, and deny your request.
If you don't make enough money, the bank might decide that you can not afford your loan even if you get a modification, and therefor deny you request.
There is nothing wrong with hiring professionals who will do a modification for you.
But keep in mind the following:
Note: You always take a risk hiring someone to do loan modifications for you, instead of doing it yourself.
You should make sure that your negotiator promises to return all of your money, or most of it, if your request for modification is denied.
When your modification is done you can start paying your re-negotiated loan.
The foreclosure suit will be dropped against your home. Be sure to get an agreement in writing from your bank. Promises over the phone are not normally honored by banks.
- This means that you sell your home, and the money you get from the sale is short of what you need to pay off your mortgage.
You will have to sell your home, and will have to leave, but this step will stop the foreclosure suit against you and your home and the bank/lender will often let you to get out of this situation without a "deficiency judgement" against you if it is your primary residence.
Short sale is usually the last step for people who want to save their good credit and get out of this difficult situation without a deficiency judgement.
For people who do not have money to bring their mortgage out of foreclosure and for whom a loan modification was denied, short sale is commonly the next step.
Only these four things can stop foreclosure against you and your home.
WHAT ABOUT BANKRUPTCY?
Remember one thing about foreclosure - only money can stop it.
Bankruptcy almost never gives you money, and therefore does NOT stop your foreclosure.
The primary function of bankruptcy for a person in foreclosure, is normally to get rid of debts other than the mortgage debt.
Sometimes bankruptcy can get rid of second mortgages or other junior mortgages also.
You might need to be lucky to get this result- it is not guaranteed.
Bankruptcy can delay your foreclosure. The amount of delay a bankruptcy will cause in losing your home will depend on whether your bankruptcy lawyer is skilled in foreclosure law.
The bankruptcy delay in losing your home will normally be 2 months to 12 months, depending on your lawyer, the bank, and the bank's lawyers.
Bankruptcy is about the worst thing you can do for your credit rating.
In a Chapter 7 bankruptcy, you are supposed to sell your possessions and use the money to pay part of what you owe to your creditors.
You don't have to sell all of your possessions however - you get to keep some things.
Chapter 13 bankruptcy has been called the home-saving bankruptcy chapter. That is because in chapter 13, the bankruptcy court can force the bank to accept a payment plan which the bank might otherwise not accept.
This is not a loan modification however. You will still need to make your loan payments. But now you will also have to make additional payments for your bankruptcy lawyer's fees, and your bankruptcy case fees.
One good thing about bankruptcy is that it can often get rid of many of your other debts, such as your credit card debts.
If you have a lot of credit card debt, and can not afford your mortgage, a skillful lawyer can help you to keep your house and get rid of most or all of your other debts.
So what can you do if you want to stay in your home, but you do not have the money you need yet?
You need more time to come up with the full amount, right?
And the bank/lender seems to be lying to you, and is about to foreclose?
You contact us
Give us a chance to help you and you will be glad you did. All our consultations are FREE.