Understanding the Foreclosure Process

Foreclosure can be a long and heartbreaking process, but it doesn’t have to be your only option. Here's a quick overview of the process:

Missed Payments: Foreclosure begins after a series of missed mortgage payments.

Notice of Default: You receive a formal warning that foreclosure has begun.

Pre-Foreclosure: This period allows you to pay off the overdue amount or sell the property before foreclosure.

Auction: If unresolved, the property is sold at a public auction.

Post-Foreclosure: If unsold at auction, it becomes bank-owned (REO).

Facing foreclosure can be overwhelming, but you have options to avoid it. At Local Cash Buyers, we offer a solution to help you avoid foreclosure by making a cash offer for your house, condo, or duplex within 24 hours.

Here's how we can assist you: Quick and Stress-Free Process

Immediate Cash Offer: Contact us for a free, no-obligation consultation. We will visit your property and make you a fair cash offer within 24 hours.

Take Over Payments: We can take over your mortgage payments and pay any overdue amounts, even if you're upside-down on your mortgage.

Rebuild Your Credit: By taking over your payments, we help you start rebuilding your credit immediately.

Tax Concerns Covered: Any back taxes will be handled at closing by the title company, so you don’t have to worry about them.

5 Negative Consequences Of A Foreclosure

Deficiency Judgment: If the foreclosure sale price is less than the outstanding loan amount, lenders in some states can seek a deficiency judgment to recover the difference from the borrower through wage garnishment or bank account levies.

Difficulty Obtaining Future Loans: A foreclosure makes it challenging for borrowers to secure new loans, as lenders view them as high-risk. For example, Fannie Mae-backed mortgages typically won't lend to borrowers with a foreclosure for seven years.

Credit Score Impact: Foreclosure significantly lowers a borrower’s credit score, with drops of over 100 points for good credit and up to 160 points for excellent credit, leading to higher interest rates if credit is obtained at all.

Credit Restrictions: Beyond affecting credit scores, a foreclosure can prevent a borrower from getting other types of loans, such as car loans, and remains on the credit report for five to seven years.

Tax Implications: Canceled or forgiven debt is considered taxable income by the IRS. For instance, if a $200,000 loan property sells for $150,000, the $50,000 difference is taxable.

Benefits of Selling Your House to Avoid Foreclosure

Protect Your Credit: Selling your home can prevent a foreclosure from damaging your credit score, which stays on your report for seven years and affects your ability to get loans or even job opportunities.

More Loan Options: Avoid foreclosure to keep more home loan options open for the future. Foreclosures limit your ability to qualify for various loan programs, including government-backed loans like Freddie Mac, Fannie Mae, VA, and FHA.

Avoid Eviction: Selling your house allows you to avoid potential eviction, which can make it difficult to find rental properties as landlords often reject applicants with evictions on their record.

Stay in Control: By selling your home, you can stay in control of the process and reduce stress, rather than waiting for the foreclosure process to take its course.

Potentially Receive More Money: Typically, selling your home yourself can result in more money than a foreclosure sale. When a house is sold at foreclosure, additional fees to lenders, foreclosure attorneys, and auction companies reduce the amount you receive.