Four Things You Should Never Do
If you fall behind on your mortgage
Absolutely Do Not
ever deed your property to a third party without absolute confirmation
your loan has been paid off.
Note: if you believe this option
is best for you, please consult with an attorney – not the
buyer’s attorney – before completing the
If you deed your property to a
third party, that party then controls the property. The new owner can
rent the property (and keep the rent), attempt to sell the property to
make a profit, move into the property or use the property in other ways.
What the new owner might not do is
make mortgage payments, and that could become a big problem for you.
Just because you no longer own the
property does not mean you are no longer responsible for the mortgage
loan obligations. The lender made the loan to you. And until it is paid
off you will be primarily responsible for the mortgage obligation.
If you give up control of the
property and the new owner does not pay on the loan, the damage to your
credit could be catastrophic.
Do Not sell your home at
a huge discount.
Unless the actual foreclosure
sale is less than 45 days away, you have time to explore options. Take
a day or two and make a few phone calls. As a general rule, if someone
is pushing you hard to get you to sell your property to them,
it’s probably because the deal they are proposing is very
favorable – to them.
If you have equity in your home,
it belongs to you. Let’s see if we can get it to you.
Do Not authorize a
prospective buyer to deal directly with your lender.
The buyer has one goal and one
goal only, and that is to negotiate a low, probably very low, price
with your lender. The buyer will ask your lender to accept a discounted
The negotiations could go on over
an extended period of time, and if the transaction does not work out
the buyer may elect not to buy your property. It could leave you with
very little time to resolve the situation and avoid foreclosure.
Further, you have no control over the information that goes to your
lender or the accuracy thereof. It is entirely possible that the buyer
could handle the negotiation and presentation of information in a way
that makes it very difficult for you to resolve your loan situation
If, however, you believe that your
best option is to allow the buyer to work directly with your lender,
make certain you consult with a real estate professional and/or an
attorney before signing a contract. If you are going to do a Short Sale
get representation from a real professional. It costs you
nothing – the lender pays the fees. Someone should
be looking out for you.
We can help, and it costs you
nothing. We have fought for homeowners like you many times –
and won. The lender wins also. They do not want to take your property
through foreclosure. That’s why they will negotiate to get
the deal done.
Do Not do nothing.
A surprising number of people just
accept what they see as the inevitable, and let foreclosure run its
course. Don’t let it happen – the damage to your
credit will follow you for years. Short Sales really do SAVE CREDIT!
Here is a report on "How
short sale vs foreclosure affects your credit".
Take a little time to explore
potential options. You do not want a foreclosure on your credit record.
It will hamper your ability to get a consumer loan or a car loan for at
least a few years, and it will be very difficult to get another
mortgage for a very long time.