Few things are more devastating to a family than having to go through foreclosure. Due to unfortunate circumstances you are facing foreclosure and may have to leave the home that you love and cherish behind.
For local CA families facing foreclosure can add an insane amount of stress to the point it may become unbearable. On top of the stress foreclosure can stretch out over months and sometimes over years thus dragging out the pain and stress over a long period of time.
Thankfully, there are multiple options available to you in CA. There are many strategies that can allow you to avoid going through foreclosure. These are all legal strategies that people use to help them avoid foreclosure in Santa Clarita CA.
In this article, you’ll learn about 3 of the many strategies that can be implemented to avoid foreclosure. The goal of sharing these strategies with you is to help you legally avoid the pain and stress that comes along with a foreclosure. Some of these strategies allow you to stay in your home, others do not. All of these strategies may not be an option for you but in most cases one of these strategies will help and whichever strategy you choose it will help relieve the burden of a looming foreclosure.
Strategy #1: Work out a deal with your lender
Strategy #1 is called a “foreclosure workout”. Basically a foreclosure workout is where you sit down with your bank/lender and explain your situation, you tell them that you don’t think you’ll be able to maintain the current payments but you’re willing to work something out so that you don’t have to move and you will continue to make mortgage payments.
Many people don’t realize, banks don’t want to foreclose on your property. Banks are not in the real estate business, they are in the business of lending money. Also, the foreclosure process is expensive and time consuming. For this reason, lenders are often okay with working out a payment plan rather than foreclosing on a property so that they can continue to get monthly payments. Some ways they may work with you is a payment plan, loan modification, or a temporary reprieve of payments.
Strategy #2. Bankruptcy
Bankruptcy may seem like a very extreme measure but it is actually commonly used in foreclosure avoidance. Bankruptcy basically lets everyone you owe money to, that you are unable to pay your bills. Filing for bankruptcy requires the foreclosure on your primary residence to be halted because creditors must stop the collection process.
While filing for bankruptcy is a common practice for foreclosure avoidance in CA, it is still a pretty extreme measure. In some cases you must sell some assets to pay off creditors. Also, filing bankruptcy has a drastic impact on your credit score. This can hinder you from getting that new car, buying a new house, or even qualifying for you child student loans. So, while this can be a good option for some, it shouldn’t be your first option.
Strategy #3. Short sale help for a foreclosure in Santa Clarita
The third strategy we’re covering is a short sale. A short sale is where you sell your home and all proceeds go towards paying off your home. In a short sale, it usually is the case that the amount you can sell for is less than the amount you owe the bank. So, depending on what you work out with the bank, the bank may take a loss or you may have to come up with the difference. If you don’t owe more than the property is worth, then you can try to sell it in a standard sale or if you need it to sell fast you can sell it to an investor like us, at SK Home Buyers. If you do owe more than it is worth, a short sale is a preferred method for people facing foreclosure because it is proactive, fast, and very effective.
- It’s proactive, this means that you get to control more of the situation rather than in foreclosure where the bank controls everything and takes your home on their schedule.
- It’s fast — in some cases, you can sell your home in as little as a week! That’s also because it’s local: You can get help for foreclosure in Santa Clarita since organizations like SK Home Buyers help people going through short sales.
- It’s very effective because it can fully wipe out, or almost wipe out, the remaining debt owed on your mortgage. Depending on your arrangement with your lender they may not even require you to come up with the difference if it isn’t enough to cover the full loan balance.
In the event of a short sale, you will still have to move but it will make the process a lot less stressful because you’ll be in control of the process. Also, in a short sale, it won’t have as large of an impact on your credit, compared to a foreclosure or bankruptcy. So if you go with a short sale you may have more options in the future on places to live.