How To Avoid Foreclosure In Los Angeles (Updated for 2019)
Are you having a problem with keeping up with your monthly mortgage payments? The thought of your dream home in Los Angeles being foreclosed is stressful, frightening, and can be quite overwhelming especially when banks and other mortgage lenders are relentless in their attempts to pursue debts or repossess the property. In this article, I will give you the best ideas to dodge this nightmare and save yourself and your family from being homeless!
The common solution for this situation is filing for bankruptcy, but it is not for everyone. It can sometimes temporarily freeze or permanently cease the foreclosure process or even lower the debt on your home, but your defense attorney must know that it is NOT the only option or solution.
If you are California homeowner and you’re several months behind on your mortgage payments, the very first step is to contact your lender who holds your home mortgage to commence loan modification, it is better if you will do it as soon as possible.
A loan modification can offer assistance for those people facing foreclosure. But applying and all the paper works can be pervasive and complicated for us first-timers. Lenders will never recommend you to seek legal assistance upon applying but you should.
Having one will make you understand your rights, and they can arrange with your mortgage holder to secure a comfortable and economical monthly mortgage payment.
Your mortgage holder may also approve of a deed in lieu of foreclosure. You voluntarily transfer ownership of the property used to secure the mortgage loan to the lender.
In acquiring deed in lieu, homeowners get rid of burdensome houses, a credit history without foreclosure and up to $2000 towards outstanding liens. With a hardship, you may even be free and clear within 90 days.
It is also very important that you seek legal counsel with a real estate attorney who thoroughly understands California’s legal system. Another wise step is to put in an application under the Homeowner Bill of Rights, which sent into effect early in 2013.
Under the Homeowner Bill of Rights, if a borrower applies for a first lien loan modification earlier than five business days before a scheduled foreclosure sale, a lender or servicer can’t record a notice of default or notice of sale, or conduct a trustee’s sale, while the application is pending.
Another way to stop foreclosure is by refinancing your Los Angeles mortgage. This will be one of the best options for you, but very hard to execute. If you refinance to pay off other debt you pay for on a monthly basis, your total monthly payment may be less than what you pay now. However, your monthly mortgage payment will be higher.
If you refinance your home loan, you can extend your loan term so that you have a longer time to finish paying on your home. This also can reduce what you owe each month. Which means that you can put away more money every month in savings, or better keep up with the rest of your bills.
Mortgage rates for conventional refinance loans are low thanks to strong backing by two of the world’s largest lending agencies: Fannie Mae and Freddie Mac. As a homeowner, you can take advantage of very low rates for a conventional refinance while they are available.
And if all things fail, your last resort will be selling your home to avoid foreclosure. If you decide to sell your house, there are several different ways to do that. You can sell your home on the traditional real estate market with the assistance of a realtor, reach out to real estate investment companies like SoCal Development Group or do it on your own as “For Sale by Owner” otherwise known as FSBO.
Posting with a realtor on the MLS may present complications, especially with your time frame. Beware that average time it takes to sell a home is between 81 – 106 days. And we all know that when dealing with foreclosure, you can not afford to wait that long.
Another way is to list your home in Los Angeles in a short sale transaction. When you list your home for sale in a short sale transaction, your lender and/or servicer must accept the buyer’s offer before an escrow is opened to sell your home. The short sale process varies from each lender.
It is smart to contact your lender before listing your house on the market so that they can settle the appropriate selling price for your home and begin collecting the necessary permissions required for a short sale.
To see if someone is a licensed real estate agent contact the California Bureau of Real Estate at (213) 620-2072 or at their website.