How fast can I make my mortgage company foreclosure on my house?
Monday, February 8th, 2010 at
5:43 am
I havent missed a payment yet but I am planning on moving within 4 months.I will let the house go with March being my last payment.Is there anyway I can help my mortgage company expedite the foreclosure? This is probably a strange question but I would like to know if it is possible to get the house out of my name within 4 months.
I know it will affect my credit but I cant sell the house because it is worth way less then what I bought it for.
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Tagged with: 4 months • foreclosure • mortgage company • strange question
Filed under: loans
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You can just stop paying now. HOWEVER, if you are in a recourse sate, the bank can come after you for the shortfall.
You need to discuss a short sale with them – depending on the bank I’ve seen this process take years to sort out. Try selling it and see if the bank will accept a short sale.
Are you sure you want to do this, this is going to be an ugly hit on your credit. Have you tried selling the house?
You cannot expidite a foreclosure. FC is investor approved and has to go through the processes. Most Prime investor backed loans have to be in default anywhere from 4 to 5 months before the foreclosure proceedings start. During this time your credit still start showing 30, 60, 90 and 120 day late marks and the score will drop quite a bit. When the investor requests forclosure proceedings start you will now have the 30 to 120 day late marks, but Pre-FC codes as well. During this time you will get hit with late fees as well and when the house goes into foreclosure you will become responsible for the attorney fees and any/all court costs that the investor incures because of the foreclosure.
Once pre-foreclosure proceedings start the actual foreclosure will generally happen within 3 to 6 months later. Sometimes sooner, again investor approved and driven. When all is said and done (if you go this route) your credit will be negatively impacted 200 to 300 points. The other impact is that *if* you let the property be foreclosed on and it happens in 2009, in January 2010 you will receive a 1099 form for the loss the bank has taken. What this means is if the bank forecloses and there is a buyer who picks it up at the auction, whatever the difference owed to the bank is (i.e. they purchase the loan for less than your principle balance), you will have to claim the difference as an Income for 2009 and pay taxes on it. The bigger the loss to the bank (i.e. it doesn’t sell), the more taxes you’re going to end up having to pay. You don’t just have the foreclosure take place and get to walk away and call it a day.
You do have alternate options to entertain if you can no longer afford the home and that you can try to do while you’re in default before a foreclosure happens.
1) Call your servicer to try to get a loan modification. You’ll need to explain your hardship, provide paystubs and bank statements, as well as your expenses. In todays world the process is taking about 120 days – but long term your interest rate might be lowered, fixed and you could end up being able to keep the house.
2) Put your house on the market with a Fair Market Value listening. Your realtor could look up the listings in your area and provide that figure. You may be able to Short Sale the property meaning that the investor would agree to let you sell the property for less than it’s principle balance – you would end up with a ‘Settlement’ on your credit and you would still have to pay taxes on the banks loss, however the negative impact to your credit would be far less.
3) Put your house on the market and if you do not get any offers for 90+ Days, contact your servicer and request a ‘Deed In Lieu’ on the house. Again, you’ll have to prove your hardship, send in the listing agreement, pay stubs and bank statements. The investor approved ‘Deed In Lieu’ doesn’t happen very often, but it does happen.
For a lot of the investor approved help that’s out there you want to make sure that the house is occupied. As the payment goes delinquent the investors will send people to it to make sure it’s still occupied. If it’s determined that it’s not, the locks can be changed. The banks are going to protect their collateral. If you have an FHA backed loan you will not be able to get assistance if the property is vacant.
Make sure you explore and exhaust all of your options before making the decision to let the property go to foreclosure. Call your servicer and have them explain the possible options and then do what is best for you long term. Sometimes it may feel like cutting your losses and running might be the best, however a year or two from now you may wish to buy another house, car, etc.. and find out that the foreclosure has longer lasting affects and is harder to overcome than doing a workout, Short Sale or Deed in Lieu would have been.
Good Luck.