“I’m behind in payments…What’s next? Giving my house back to the bank in Los Angeles?”
Nobody ever wants to lose their home. Unfortunately, sometimes financial issues become large quickly and overwhelming and all your financial commitments can become an even bigger burden and too much to handle. Most of us have reached a high level of stress at some point in our lives that feels just like that.
If your financial situation gets away from you, you may be left in an unfortunate situation of having to give your house back to the bank in Los Angeles California, putting you in a position of not having a home for a time. Also, there may be long-term consequences, including a dramatic and long-lasting impact on your credit (which will affect your ability to get credit and moreover to buy another house in the future).
None of us ever want to have to go through that. That’s obviously not a good outcome. Luckily, there is a tactic that you can use today to help you proactively protect yourself and also will get you back on track to financial health.
The foreclosure process – an overview
The foreclosure process varies from state to state and also it depends on the type of loan that you have.
Usually, if you miss a few mortgage payments, your lender will first start sending you “notifications” and then they become “warnings”. Over time, if you fail to pay back the mortgage payments that are now behind, eventually, the lender may put your house up for trustee sale or auction.
How long you can stay in your house after it is sold at auction depends on the state in which you live. At some point, however, you will need to find a new place to live. It can be very hard to come to terms with that, but it does happen.
You have options
If you wait until your home is foreclosed, meaning someone bought it at the trustee sale or auction, it will most likely have a very negative effect on your credit rating. One option to protect yourself is to work out an arrangement with your lender in advance of the trustee sale. That arrangement is called a “deed in lieu” of foreclosure.
“Deed in Lieu” is when you hand over ownership of your property to the lender so that they save the money they would spend on continuing the foreclosure and the trustee sale, which may very well be significant. And you will avoid having a foreclosure on your credit. It’s a much softer approach. Plus, the lender will most likely give you a timeline for moving out, instead of having to face a sheriff at your door serving you an eviction notice.
One of the most proactive things you can do to avoid foreclosure is by selling your house before it goes up for trustee sale or auction. If your loan is paid in full then there will be no more penalties against you and your credit rating may actually improve because it was current before it was paid off!
At The Shenbaum Group, Inc., we’re professional real estate investors. Contact us today at (424) 242-9304 to find out what we can offer you for your house — even if it needs lots of work.
I want to avoid giving my house back to the bank in Los Angeles!
Why do people choose to sell their home instead of going through the foreclosure process? Well, losing your home can be extremely difficult to handle, but the impact on your overall financial situation and your credit is considerably less than if you let the foreclosure process, including going to auction takeover. In fact, going through a foreclosure process will most likely have a large impact on your credit score by as much as 100 to 150 points. So the short-term challenge of selling your house is still a better choice than the long-term pain of giving your house back to the bank.