When local CA homeowners face financial challenges they may find themselves facing foreclosure.
Foreclosure is the process the mortgage holder has to go through in order to take back a property when the borrower misses payments. This allows them to recoup their losses by reselling the property to pay off the loan.
If you find yourself entering the foreclosure process, you’re probably wondering what your options are or if you even have options.
In this blog article, you’ll read about a few foreclosure prevention measures in Santa Clarita that you can take to avoid having a foreclosure.
Foreclosure prevention measures in Santa Clarita CA
Everyone’s situation is different, some of these foreclosure prevention measures may not work for you but we’re covering a few different ones so you can make your own decision:
1. Pay off your mortgage / sell your property. The simplest and fastest way to stop foreclosure in Santa Clarita is to pay off your mortgage. This is all a bank really wants anyway. They just want their money and if you can come up with the back payments or the full loan amount, they would be more than happy to let you stay in your home. Obviously, this probably isn’t possible which may be why you’re in foreclosure in the first place.
2. Work out a deal with your bank. Sometimes it’s possible to work out a deal with your bank, you just have to sit down with your banker and figure out a solution. Most banks don’t want to have to do a foreclosure because it’s time consuming and costly. So if you are willing to work out a deal and are truly able to adhere to the terms they may let you stay in the home. A possible scenario is to spread your payments over a longer period of time so that your monthly payment becomes smaller. The bank gets their money and you get to stay in your home, it’s a win-win.
3. Do a short sale. A short sale is when you sell your home for less than the amount owed to the bank or lender. If you are going to do this, make sure you discuss it with your bank first, don’t just go sell it for less than you owe and think they’ll accept it. If you do it without approval, you will most likely be responsible for the difference in the loan balance. Doing a short sale limits the impact on your credit score and it gets the bank off your back!
4. Give your deed in lieu. Another option is a deed-in-lieu-of-foreclosure, which basically means you hand over the deed to the property in return the lender won’t pursue a foreclosure. This typically works if the value of the property is approximately the same as the amount owed on the mortgage. If, you owe more than the value, the lender may pursue a different avenue.
5. File for bankruptcy. For some, filing bankruptcy will have a more dramatic impact than having a foreclosure because a bankruptcy affects your whole life. However, since filing a bankruptcy will halt the foreclosure process, it is still a worthy mention on ways to avoid foreclosure in CA.
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.