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San Diego downtown real estate broker

Bob Schwartz, CRS, GRI 

Certified Residential Specialist



San Diego, California 92101

Telephone - Cell:
(619) 300-8819

(619) 229-0048

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Home Foreclosure Options


Bank foreclosure is a devastating thing. You will not only lose your home but a lot more. Your credit record will be destroyed and you will find it very difficult to borrow any loans to help you out in the future. However sometimes this is your only alternative. When you receive the letter of repossession you will need to act fast and make a decision. Firstly remember that you do have some options but these will depend on your financial situation. If your problems are only temporary then do consider these options before having to face repossession and all that comes with it. However if you see no improvements in your financial situation then repossession may be your only alternative.

Most lending institutions are willing to work with their customers and will provide some basic foreclosure information to them in order to come to an agreeable solution that does not include repossession proceedings on their homes. The property owner needs to ask their lenders exactly how they do their foreclosures if no other solution is available. There may be instances where a lender is willing to accept a lower payment for a brief period of time to keep the loan from getting any deeper into default.

Bank foreclosure means that you have failed to pay your monthly payments and the bank has given you a notice that unless you can obtain the money owed they will reclaim your home. This is quite a shocking thing to have to face. However do not panic but know what your options are. As soon as possible go and talk to your lender and be honest and up front about your financial position. They will be happy to work with you, as they do not want to be stuck with a repossessed house.

What are your alternatives, when faced with bank repossession of your home? Surprisingly there are quite a few. Firstly you can do what is known as a pre foreclosure loan. This is when you find an investor to pay off your present loan and take over the title of your home. This can be a family member or an agent interested in selling your home for monetary gain. If it is an agent they will sometimes pay you a little more and you will make a minor profit. In this way you will both win. You will save your home from being repossessed and the agent has made a nice profit. Of course the agent will come out better monetary wise. The lender is happy because he got back his money and will not be stuck with a repossessed house to auction.

Other foreclosure options include using a reverse mortgage. People over the age of 62, who are looking at a repossession of their property, may have the option of securing a reversed mortgage to pay off the debt. Basically what a reversed mortgage does is take the current equity in the home or property and turn it into usable cash without having to secure another debilitating loan.

Some lenders offer the property owners a redemption period. This is a period of time after the bank has repossessed the house and the homeowner has to find a way to pay the debt in full, whether by refinancing or sale. Usually eviction proceedings follow after the redemption period is offered. The best thing anyone can do when faced with foreclosure is to stay in contact with their lenders, so that they can examine what legal options they have in saving their homes. This will enable them to work out an agreeable solution between themselves and the bank. If you donít ask for the information on your foreclosure, the help wonít come to you. Remember, saving your home may be as simple as making a phone call.

Itís also very useful during a foreclosure to document everything. No matter what else happens, make sure you document every conversation with your mortgage company that you have. Repossession procedures usually take three to six months to run their course from start to finish. As long as you stay in contact with your lender and are either; making an effort to work out an agreeable arrangement to bring your mortgage to date, to pay lesser amounts as agreed. Or attempting to sell your home, you have a legal leg to stand on if for some reason you need to fight the lender in court.

Always remember that the bank does not want to foreclose on your property any more than you do. This is because they stand to lose money. When your house goes up for auction, the lender will be lucky if they can get their investment back, as houses go very cheap. Everyone loves a bargain, even if it is at someone elseís expense. Take advantage of this situation and after you miss a couple of payments talk to your lender about reducing the monthly payment. They may very likely work with you so they can protect their investment.

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