FAQ’s

Short Sales and Foreclsoure – Frequentily Asked Questions

Here’s a list of frequently asked questions. These are merely intended as a start for you to get an understanding of the pre-foreclosure, foreclosure, and other processes you may encounter. Please remember this is merely a starting point and you are encouraged to ask additional questions and request more information.

Can I ever buy a home again if I do go through foreclosure?

  • Yes. Even if you do go through the full foreclosure process, the current conventional guideline states that you must wait 5 years from the time the house is sold/title is transferred to a new owner to purchase a new home. FHA guidelines currently require a 3 year waiting period. You must also have re-established credit during this time period and standard qualifying guidelines will apply.
    top

What will a foreclosure do to my credit?

  • A foreclosure reports as a derogatory payment which will remain on your credit report for 7 years from date of completion. Your credit score will drop from 50-250 points, depending on how high of a credit score you had to begin with. Those with high credit scores now will have more to drop than if the score is already low.
    top

What is my best option?

  • This depends on how long it has been since the foreclosure was started. If you’re at the beginning of the process, you will have more options than if your auction is scheduled for tomorrow. Generally speaking, if you can’t sell your house then a short sale might be the best option for you. You can fill out the assistance application for a free professional consultation.
    top

What is a short sale?

  • A short sale occurs when the proceeds of a real estate sale fall short of the balance owed on the property. In a short sale, the bank or mortgage lender agrees to discount a loan balance due to an economic or financial hardship on the part of the home owner. This negotiation is done through communication with a bank’s Loss Mitigation department. The home owner sells the property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender, sometimes (but not always) in full satisfaction of the debt. In such instances, the lender has the right to approve or disapprove a proposed sale.
    top

Can the owner sell the property while it’s in foreclosure?

Will bankruptcy stop a foreclosure?

  • While it may delay the process, bankruptcy does not stop a foreclosure. It’s crucial to understand the bottom line of what this will cost and what your total expenses will be before filing bankruptcy. This process will only delay the foreclosure process. During this time, interest and attorney fees are still added to the total due. Filing for bankruptcy puts an automatic “stay” on the property. In order to continue with the foreclosure process, an attorney must go before the judge and ask that the property be released from the “stay”. It can take anywhere between 1 month to 1 year to release the “stay” by a judge, depending on the attorney.
  • Also, keep in mind that most mortgages won’t consider a short sale if the homeowner is in bankruptcy because it is considered a collection activity and collection activities are prohibited in a bankruptcy.
    top

What exactly is a foreclosure?

  • Foreclosure is a legal process in which a bank or other creditor either sells or repossesses the parcel of real property, home or land, after the owner has failed to comply with the mortgage or deed of trust agreement with the lender.
    top

How much longer can I stay in my house?

  • This depends on where you are in the process. Typically, a foreclosure takes 120 days from the time the sale date is scheduled. If you are involved in a bankruptcy or the trustee delays the closing, it can take longer.
    top

Why are people contacting me?

  • The Notice of Default is a matter of public record and can be obtained from various places. Because so many people are in default right now there are people who are just out to make a quick buck. Because most people are not aware of their options, we want to make sure you are as educated as possible about your situation.
    top