If you’ve fallen behind on your home’s mortgage payments, you may have received a notice of foreclosure. This is a frightening time, and the foreclosure process can be confusing. While a foreclosure means that you could lose your house, you also have options here – but you need to act quickly. The best step to take is to learn about the foreclosure process and the ways you may be able to stop foreclosure in Arizona.
What is Foreclosure?
If you have an existing debt (like a mortgage) on your house and you’re unable to keep up with the payments that you owe, your bank and mortgage company can force your home to be sold to repay that debt. “Foreclosure” refers to the legal process that these companies use when selling your home. While you’ll typically receive a foreclosure notice after missing three or four mortgage payments, your mortgage lender can start the process after you miss just one payment.
In Arizona, it takes an average of six to nine months to foreclose on a property. The process begins when your lender files a Notice of Default. Your home will be auctioned 91 days after that notice is filed. If you are evicted, you will typically receive a notice stating that you need to leave the property within 72 hours.
If your house is sold at auction, any proceeds will go toward paying real estate taxes, then mortgages, and then any lien holders or creditors. If there is any money left once all of those debts are paid, you will receive what remains. Keep in mind that your lender may sell your house for less than what you owe on it, so you may not receive any money.
Ways to Stop Foreclosure in Arizona
In Arizona, you have many options available to you, but it’s important to act quickly. Once you no longer own your home, these options disappear.
Contact Your Lender
Before exploring other options, start by contacting your lender. Explain why you’re having trouble making your mortgage payments and provide them with details about your income. Your lender may be willing to work with you to help you through a tough time, especially if you’ve found yourself in a temporary situation.
You can also get hep through a HUD-approved counseling agency. Most HUD agency counseling services are free. You can call (800) 569-4287 or find a HUD counselor near you online.
If you bought your house with a Veterans Administration guaranteed loan, contact your local VA office for help.
If you’ve experienced an event like recently losing your job or have had an unexpected increase in your living expenses, you may be able to arrange a repayment plan with your lender. This plan would be based on your financial situation and could involve a temporary reduction or suspension of your mortgage payments. You’ll need to contact your lender to request this type of plan, and will need to provide your lender with financial information to show that you can meet the plan’s requirements.
Your lender might be willing to modify your loan if you’re unable to make your mortgage payments long-term. A modification could involve a reduction in your interest rate, a different type of loan, or extending the loan term’s length to make your payments more manageable. Modifying your loan could cost your lender less than it would to have you default on the loan, so your lender may be open to this type of arrangement.
In some situations, mortgage lenders will work with you to get an interest-free HUD loan. This loan would help to cover any missed mortgage payments, getting your mortgage current again. You’ll need to meet certain requirements, including the ability to start making full mortgage payments again, and being at least 4 months but no more than 12 months delinquent on your loan. Contact your lender and your local HUD office to see if this is an option.
Pre-Foreclosure and Short Sale
If you’re more than 90 days late on your mortgage payments and your lender has begun the foreclosure process, you may still be able to sell your home. With a pre-foreclosure sale, you’ll need to use the money you receive to catch up on your missed mortgage payments and pay off the rest of your mortgage.
If you owe more on your mortgage than your house’s market value, you may need to explore a short sale situation. In this case, you’ll ask your lender to let you sell the property for less than what you owe, settling your mortgage debt.
Selling your house while you’re in foreclosure means that you need to act quickly. In these situations, working with an investor who pays cash for houses can allow you to sell your house much faster than you would in a traditional sale situation.
If you don’t want to bother with selling your home and don’t care to keep it, you can forfeit your property. This can have serious tax and credit consequences, so it’s important to speak with an attorney and a real estate professional if you’re considering this option.
Exploring Your Options in Foreclosure
If you’re facing foreclosure, you’re probably stressed and confused. Remember that you have options here, and there are ways to stop the foreclosure process and even keep your home. Call Cash For Homes Arizona today at (480) 703-5914 to learn how we can help you sell your house quickly.
Are you currently in foreclosure and what options are you considering?