Local TX homeowners who are facing a financial challenge may find themselves in foreclosure.
Foreclosure is when the mortgage loan doesn’t get paid back and the bank begins the process to take ownership of the property to recoup its losses. It varies from state to state but in TX it is a normally a non-judicial process. The definition and explanation can be found here at Texas Foreclosure Law.
If you find yourself entering the foreclosure process, you might wonder if there is anything you can do about it.
In this blog post, you’ll read about a few foreclosure prevention measures in South Texas area that you can take to keep your home from foreclosure. Disclosure: I am not an attorney so this is not legal advice but general information. Every situation is different and the advice of any attorney should be obtained in your situation to ensure the best results.
Foreclosure prevention measures in South Texas area TX
These foreclosure prevention measures might not all work in your situation but we’re telling you about them so you can make the decision for yourself:
1. Pay off your mortgage / sell your property. The quickest and easiest way to end the foreclosure process is to pay off your mortgage. After all, this is all the banks wanted in the first place so they would be happy to let you stay in your home and they get their money back. Admittedly, this is not always possible, which is perhaps the reason that you’re in foreclosure in the first place.
2. Work out a deal with your bank. Sometimes you can work out a deal with your bank where you sit down with a mortgage or foreclosure specialist and talk to them about changing the structure of your mortgage. Perhaps your payments get spread out so they are lower each month, for example. Just make sure that the deal works for you — you don’t want to just repeat the process. It is a process that has to be started by you discussing your current circumstances with the bank to see if they have a program that will work for you.
3. Do a short sale. A short sale is when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding amount with the bank. This keeps a foreclosure from impacting your credit score and it gets the bank off your back! It is a much better alternative to a foreclosure. It is a bad mark on your credit but not nearly as bad as a foreclosure mark.
4. Give your deed in lieu. Another option would be a deed-in-lieu-of-foreclosure, which basically means that you will hand over the deed to your house to the bank and they agree not to put you through foreclosure. This will often only work if your house is worth approximately the amount owing on the mortgage. If not, the bank may pursue the difference.
5. File for bankruptcy. In some ways, a bankruptcy is far more dramatic than a foreclosure because it impacts your whole life. However, once you file for bankruptcy, the foreclosure process has to stop so it’s still a foreclosure prevention measure. The bankruptcy can give you time to regroup but it will not stop your responsibility to make your mortgage payments.
If you’re not sure which one to do, consider this: If you can afford payments and you want to stay in the house then a foreclosure workout arrangement (#2) is probably your best option.
If you want to put everything behind you and move on with your life then consider selling your home and paying off your mortgage with that money.
Considering selling your TX house?
We buy houses in Tx for cash and would love to see if we can help you during your short sale. Contact us by filling out the form on this page and we’ll see if we can work with you.