It’s extremely unfortunate, but many families and homeowners in Phoenix lose their homes to foreclosure every year. It can be a very scary situation, especially if it’s never happened to you before… hearing about others going through it is one thing but when it comes to you and your finances it’s a whole new ballgame. There are many situations and circumstances that can cause someone to fall behind on payments, whether it’s due to uncontrolled circumstances or letting a property go because it’s worth a lot less that what they owe on the house. Any way you face it though, it’s never fun. If you find yourself in the situation where you’re behind on payments and/or facing a foreclosure – there is help and you don’t have to do it alone.
We provide confidential and private consultations to talk to you about your best options when you contact us… we are upfront and honest – if after talking to you and we don’t think it’s a good idea to sell your house we’ll let you know. We will always recommend that you get professional advice regarding your situation and seek to find the best option for you.
Whatever the cause of an owner to fall behind on their mortgage payments, the foreclosure process from that point onwards is fairly set. Most times lenders try to give the homeowner a little bit of time to try and catch up on the payments… most times we’ve seen about 90 days. At that point, the lender will file a public default notice. Basically they will send someone out to the house to tape a public notice on the door saying that they are foreclosing on the property. This will then initiate the foreclosure process, and at this point the property officially enters the pre-foreclosure stage.
Pre-Foreclosure in Arizona
Pre-foreclosure is kind of like a grace period. The bank would still rather have the homeowner stay in the house and make their payments than file for foreclosure. The foreclosure process is very expensive for the banks and they have procedures in place to avoid it if at all possible. In pre-foreclosure, the homeowner is being warned that they’re in default and need to do something about it, but at this point, the lender is unable to claim back the property and sell it to recoup their costs. Arizona state law gives this grace period 90 days… so from the time they post the notice on a homeowner’s door, they have 90 days to try and catch up the payments or the bank will sell the home at the foreclosure auction.
Catch up the payments to pay off the default
If the owner can find a way to put together the money to pay off the default amount, which includes the missed payments/missed interest/late fees/ and usually attorneys fees, then the foreclosure auction will be cancelled and the home is removed from pre-foreclosure. If the amount in default is small – relative to the owner’s income and ability to repay, and the default was caused by a temporary glitch in circumstances such as being temporarily laid off work or medical issues, then it may be worthwhile taking out a personal loan or borrow the money to repay the debt. If the problem is ongoing or cannot be cured – like a divorce causing a loss of income or the having an adjustable rate mortgage where the payments go through the roof, however, this may just cause more problems for the homeowner.
You could sell the house
Sometimes this is probably the best solution if meeting the repayments is likely to be an ongoing problem. In our current market, most homeowners find themselves owing more than what the home is worth finding themselves in a short-sale situation. If the homeowner waits and lets the lender sell it at a foreclosure auction, the sale price is almost certainly going to be much lower, because the lender just wants to offload the property as fast as possible – so if you do have equity in the property you’re certainly better off hiring a Realtor® to help you sell the property.
The notice of default is a public notice… and at this time the homeowner will get bombarded with letters, calls and people knocking on the door offering their help in selling the house. This is often a good time for an investor to approach the homeowner with a fair offer to purchase the property. However, many homeowners in pre-foreclosure don’t know what to do because it’s a new situation… and a very scary and embarrassing one at that. Sometimes instead of trying to make the best of a bad situation and will actually avoid taking action until it’s too late. Many also don’t understand the long-term detrimental effect a foreclosure listing will have on their credit score.
We are not tax or financial professionals or attorneys – we recommend seeking out a professional when considering the financial and credit implications a foreclosure or short-sale will have on your credit record. There are quite a few attorneys and tax professionals that are willing to offer free advice, if you need a recommendation you can contact us and we’ll be happy to put you in touch with our recommended professionals offering their services for free.
Nobody wants to face foreclosure on their home, but at least the pre-foreclosure period gives the homeowner the opportunity to find a solution that’s a little more favorable for them. Waiting for the property to pass into foreclosure and be seized by the lender is almost never the best option.
We provide confidential and private consultations to talk to you about your best options… best of all we are upfront and honest – if after talking to you and we don’t think it’s a good idea to sell your house we’ll let you know. We will always recommend that you get professional advice regarding your situation and seek to find the best option for you. If you do decide to sell your house now, we of course can help you with that and encourage you to give us a call today to talk about your options and how we can help you! Remember, you don’t need to do this alone, there are people who can help. Call us at 480.620.8874 or send us an email right now and we’ll be happy to talk about your situation and discuss your options.