With millions of homes across the country going into foreclosure, it’s important for both buyers and mortgage holders to understand the process.
So what is a pre-foreclosure in Massachusetts anyway?
Many homeowners across America and Massachusetts are facing difficulties making their monthly mortgage payments.
When a homeowner misses 3-6 months of mortgage payments, the lending institution will issue a warning, notifying the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”
Banks and mortgage lenders typically provide three months for the homeowner to become current. Of course this number can vary by bank and situation sometimes.
If a homeowner fails to make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the homeowner. Thankfully, during this stage of the foreclosure process, a mortgage holder has the opportunity to take advantage of several options to prevent losing their home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Massachusetts mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Massachusetts like us at Pegasus Home Buyers, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your Massachusetts MA area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
- Loan Modification Programs in Massachusetts can offer relief for homeowners struggling with mortgage payments. These programs are designed to restructure your mortgage loan, making it more manageable and affordable. Modifications can include extending the term of your loan, lowering your interest rate, or even forgiving a portion of your principal balance. To qualify for a loan modification program, you’ll need to demonstrate financial hardship and provide documentation of your income and expenses. Be aware that not all lenders offer these programs, and the application process can be time-consuming. However, if you’re approved for a loan modification, it could significantly improve your financial situation and help you avoid foreclosure in Massachusetts.
- Consult with a HUD-Approved Housing Counselor. Seek help from a HUD-approved housing counselor. The U.S. Department of Housing and Urban Development (HUD) offers free or low-cost housing counseling services to homeowners facing foreclosure. HUD-approved housing counselors are trained to help you understand your options and navigate the foreclosure process. They can provide valuable advice on loan modification programs, short sales, and other alternatives to foreclosure. To find a HUD-approved housing counselor in Massachusetts, visit the HUD website and search for local agencies. Working with a housing counselor can provide the guidance and support you need to make informed decisions about your home.
- Utilize Foreclosure Mediation Programs in Massachusetts. Take advantage of foreclosure mediation programs in Massachusetts. Some states and local governments offer foreclosure mediation programs to help homeowners and lenders resolve their issues and avoid foreclosure. In these programs, a neutral third-party mediator assists both parties in reaching a mutually agreeable solution. Mediation can result in a loan modification, repayment plan, or other alternatives to foreclosure. To find out if Massachusetts offers a foreclosure mediation program, contact your local government or consult with a HUD-approved housing counselor. Participating in a foreclosure mediation program can provide an opportunity to negotiate with your lender and potentially save your home.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your Massachusetts area house – We buy houses in Massachusetts and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.