We all have rough times every now and again. As a property owner, having a rough time may mean losing the biggest investment of your life: your Milwaukee house. If you are unable to make your mortgage and insurance payments, you are about to be facing foreclosure with your lender if you miss a certain amount of payments; this all depends on your mortgage document.
Foreclosures Happen To The Best Of Us
Usually, the foreclosure process doesn’t begin until you have failed to pay between 3-6 payments. First of all, you must understand that foreclosure is a process that has several steps.
The second step is called a short sale, and this is when the owner tries to sell the property before the bank forecloses, but the market value is just a little less than their balance due. Keep in mind that the bank can decide not to accept any offer that is less than the balance due, but if they accept it and the owner manages to short sell, it is much better for the owner’s credit.
The third step is the foreclosure auction. During this time the bank is trying to get the most for the property, in a short amount of time.
The fourth and last step is an REO (“Real Estate Owned”), and it happens if the property doesn’t sell at auction. It means that the bank repossesses the property and places it on the market in order to sell it.
In conclusion, “foreclosure” is the process during which bank takes possession of your Milwaukee house. This impacts your credit score and it will also show up in any report that future landlords would run. The impact of foreclosure stays on your credit for 7 to 10 years! Depending on your situation, you may have more time to live in your home if you let it go to foreclosure because of the statutory redemption period. This time frame can be shorter or longer depending on whether you took title via deed of trust or mortgage. If you have a mortgage, than this process can take from 30 days to 2 years. At the end of the redemption period, if you still haven’t payed out your debts or if you still can’t make your payments, then you have to move out. If you took title through a deed of trust, then there usually isn’t any redemption period and you will have to move out immediately.
Is A Short Sale Really The Answer?
During the foreclosure process as described above, you have the opportunity to list your Milwaukee house as a short sale. The best time for a short sale is the time period when you realize you are unable to make your payments as outlined in your loan agreement, and before the lender files legal action against you and officially owns your house. You will be able to list your house on the market and try to get an offer that will satisfy the balance of your loan or get really close to it. This might be a difficult process because you will have to be in constant communication with the lender about the offers you receive and will have to wait for them to approve or counter offer the offers you receive. If you do have an offer that the bank is willing to accept, selling your Milwaukee house to that buyer would relieve you of some of the credit damage of having a foreclosure, although it would still negatively affect your credit.
The best option would be to avoid the foreclosure process altogether and negotiate a sale of your property before you get to the point of missing payments on your loan.