How To Avoid Foreclosure in Kansas City?
These Steps Can Help!
Step 1: Talk To Your Lender
Life happens… All of a sudden you find yourself behind payments on the mortgage of your Kansas City home and wondering.. “What are my options if I am behind payments or pending a foreclosure?”, we understand. Whether it’s a job situation such as a job loss, loss of income, health or life event it is quite common to find yourself in this position but there are many options and paths to analyze. Let’s talk through some of the scenarios and solutions regarding How to Avoid Foreclosure in Kansas City.
As obvious as it may sound, your first call should be to your lender to understand if there are any available programs such as loan modifications or refinance options available to you. It is important for you to understand your own current loan situation, figures and timeline so you can make an informed decision on your next step.
If in fact, you have received a foreclosure notice this may be in fact a bit too late but at a minimum, you may want to consider having an open and transparent conversation with your lender so you can understand any present options available through them.
It is also crucial to understand directly from your lender key factors such as:
Foreclosure Date Loan Repayment Amounts Loan Principal Balance
Accumulated Arrears Payment Balances Accumulate Late and Lender Fees
Step 2: – How To Delay or Stop Foreclosure
It is quite a stressful situation when your home in Kansas City is at the risk of foreclosure due to non-payment of the mortgage. However, listed below are ways to help avoid foreclosure fast and make the impact as little as possible on your life. One of the best options you can possibly have is to sell your house AS-IS. You can pay the amount owed to the lender and still make a profit out of the house. If you want to avoid foreclosure fast you need to know what options you have. You need to be aware of the mistakes people usually make facing foreclosure. Since one mistake can cost your home and considerable financial loss, whatever option you choose must be contemplated with professional assistance.
File for Bankruptcy
Generally the most known option to stop foreclosure but at the same time the most severe on your credit report, this option may be for you if you are determined to stay in your property for more than 10 years and do not need any credit for other life matters such as credit cards, cellphones or even employment. It will also take a financial investment in attorney fees for retainers and monthly Bankruptcy payments to stay through the process. Be prepared to weather the expenses and manage the credit impacts of this option.
PROS
VERIFIED – This is a proven way to prevent foreclosure.
CONS
CREDIT REPORT EFFECTS – It is one off. the worst Credit Report distress histories to have.
MONEY – It is typically upfront and monthly cost to stay in BKPTCY with an attorney.
Apply For Loan Modification
If you are proactive in conversation with your bank this may be great fit for you but do not wait until last minute to start working the process and banks are not necessarily proactive in this manner and this requires time windows for reviews and approval. Raise this option with your lender as soon as possible to prevent even the scheduling of a foreclosure at the county steps.
PROS
CREDIT REPORT EFFECTS – This is probably the least credit report adverse method and allows you stay in your property if approved.
CONS
TIMELINE – Need to start working early in the process with the bank and not up until a few weeks prior to being foreclosed.
MAY NOT BE APPROVED – Most loan modifications have a very thorough process, not all are feasible and depend very much on the lender and loan standing history with the lender.
Short Sale Process
This is a popular option if you are behind payments, want more time to stay in your property and do not want the negative effects of a foreclosure or bankruptcy in your credit report while at the same time acknowledging that the balance owed might be really close to market value in its current condition or even owing more than what the value is with arrears. Seek professional help with this type of approach to be successful it takes specialized knowledge but it should not be at your costs, unlike the Bankruptcy process. We do have a specialized department that manages the Short Sale process for our sellers in a complete manner from initiation, stopping foreclosure with a hardship letter (without bankruptcy) all the way to closing at no cost to you.
PROS
EXTENDED OCCUPANCY TIME–The short sale process is a lengthy (3-9 Months)
RELOCATION COMPENSATION POTENTIAL— It is possible, although not guaranteed, that a seller may be eligible for relocation distress compensation usually in the $2,000 to $4,000 range
CONS
SPECIALIZED KNOWLEDGE–This process requires a professional Short Sale Agent that manages the process from A to Z for it to be completely successful. It is not a DIY (Do It Yourself Process)
MAY NOT BE APPROVED–A professional Short Sale agent must promptly communicate with the bank with the required forms and contracts.
CREDIT REPORT EFFECTS–The short sale distress will show on your credit report but is considered much less harmful than a Bankruptcy or Foreclosure and is removed in about half the time (Approximately 5 years)
CASH OFFER SALE
If your property has some equity and you would like to salvage your credit in the most effective way possible for a fresh start a CASH offer from Sell Your KC House.com may be your best fit. Simple and effective a cash offer allows you to move on, pay the loan off and get cash in your hand after the sale all without having to make further investments or repairs and lengthy timelines with the uncertainty of the open market sale.
PROS
ELIMINATES FORECLOSURE – If a Cash Offer is accepted between a private buyer and seller the foreclosure process is completely eliminated. The foreclosure process gets eliminated due to the earlier cash sale in the time period allowed.
IMPROVES CREDIT REPAYMENT HISTORY – Due to the effectiveness of a cash offer the loan is repaid in full and credit report updated with loan repayment history helping improve your credit report history with behind payments.
CONS
NOT FULL MARKET VALUE SALE – As local Kansas City home buyers, we make a Fair Cash Offer by accounting all of the costs involved with buying, selling, repairing and updating a home allowing for a business profit. Due to the sensitiveness of the timeline and what is at stake we highly recommend heavily vetting the house buying service being used to determine high certainty of actual closing without delay. You will see, the home owners that work with us are very satisfied!
“Subject To Payments” Sale
This is a creative way approach avoiding foreclosure on a houses that may not be fit for a cash offer due to lack of equity and are looking to salvage the personal credit of the borrower. This may not be the solution in every case and requires proper disclosures from all parties to be done successfully. If you think this is an option for you, be sure to let us know!
PROS
ELIMINATES FORECLOSURE – If a Subject To payments offer is accepted between a private buyer and seller the foreclosure process is completely eliminated. The foreclosure process gets eliminated due to the earlier sale in the time period allowed.
IMPROVES CREDIT REPAYMENT HISTORY – Due to the effectiveness of a a closing and re-instatement of the loan up to date with all amounts arrears with loan repayment history helping improve your credit report history with behind payments.
CONS
DUE ON SALE CLAUSE – Most mortgage notes have a “Due On Sale Clause” but not many banks actually exercise it as long as all payments and insurance payments are made on time and kept. Often times, we work with a company that provides a type of insurance for this.
MORTGAGE STAYS IN CREDIT REPORT – The mortgage is not paid off although current. This means that it still shows in your credit report as the original borrower of the loan. As long as the payments are made on time it can actually be considered a Pro because it shows good repayment history on your credit report.
If you are facing FORECLOSURE and are looking for a way out, please contact us!
We may be able to help by buying your home, preventing bankruptcy, credit problems, and losing all the money you have put into the house already!
Let’s find out if an offer from Sell Your KC House is right for you…