With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in Memphis anyway?
Numerous homeowners in the United States, including those residing in Memphis, are encountering challenges in keeping up with their monthly mortgage payments. In situations where a homeowner fails to make payments for three to six months, the lending institution will send a warning to the homeowner indicating that they must either pay or face the possibility of losing their home. This particular period is referred to as “pre-foreclosure.”
Typically, homeowners who fall behind on their mortgage payments are given a grace period of three months by banks and mortgage lenders to become current. However, this time frame may vary depending on the bank and the specific situation. If the homeowner fails to make the necessary payments during this period, the bank will initiate foreclosure proceedings, taking over ownership of the property and evicting the homeowner. Fortunately, during this stage of the foreclosure process, the mortgage holder still has options available to them that can help prevent them from losing their home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Memphis mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Memphis like us at Memphis Home Buyers, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Memphis Tennessee area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are cognizant of the financial difficulties that many individuals are facing across the country and are often willing to work with borrowers in these situations. It’s crucial to be truthful and communicate with your lender, as they may be able to offer you options that can help you stay in your home or at least salvage your credit rating.
Foreclosure can have a detrimental impact on your credit score, potentially lowering it by 200-400 points, and can prevent you from obtaining any type of loan for 5-7 years. Therefore, if you’ve received a Notice of Default from your lender, it’s important to be diligent and take the necessary steps to address the situation promptly.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Memphis area house – We buy houses in Memphis and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you are currently in the pre-foreclosure stage, it is important to act quickly and explore your options. Despite the daunting nature of this situation, it is important to remember that there are still solutions available to you.
One of the first steps you can take is to reach out to your bank or mortgage lender to see if they are willing to work with you on a solution. This may include refinancing, loan modification, or other options that can help you avoid foreclosure and keep your home.
Alternatively, if you are looking for a more immediate solution, you may want to consider contacting us to see what we can offer for your house. We specialize in buying houses in pre-foreclosure and can provide you with a fair and competitive offer.
In addition to our home buying services, we also offer a range of free resources to help homeowners facing foreclosure. These resources include information on government programs, financial counseling, and other support services that can help you navigate this challenging time.
Don’t wait until it’s too late. Take action now and explore your options to find the best solution for you and your family. Whether you choose to work with your bank, sell your house to us, or access our free resources, there is help available to you in the pre-foreclosure stage.