A Foreclosure In Greenville, NC? What’s that?
Let’s keep it super simple… “A foreclosed home is one in which the owner is unable to make his mortgage loan payments and the bank repossessed the home” (source). When you stop making your house payments… your lender has the right to foreclose on your property so they can attempt to recoup their money that was lent to you. They can do this because they have a deed of trust filed at the county courthouse, which gives them the power to take it back. There are two types of foreclosure here in Greenville, NC. Those are Judicial and Nonjudicial foreclosure.
Homes are foreclosed on when a borrower fails to make mortgage payments. The lending institution assumes ownership and possession of the property, evicting the borrower. The eviction is completed by the sheriff’s department, who posts a notice on the door and requires the former owner to vacate the premises by a certain date. These properties are then sold at auction or more traditional means utilizing the service of real estate agents. A foreclosure can destroy the credit rating of a borrower, and make it close to impossible to obtain a mortgage for many years.
Depending on the state that you live in… a foreclosure can work in different ways. Check out the foreclosure process information over here at the HUD Government website.
What Is A Short Sale?
In a short sale, the home is still owned by the borrower.
The definition of a short sale is… “A short sale is a sale of real estate in which the proceeds from selling the property will fall short of the balance of debts secured by liens against the property, and the property owner cannot afford to repay the liens’ full amounts and where the lien holders agree to release their lien on the real estate and accept less than the amount owed on the debt“. Basically, the bank says, “You’re really behind, so we’re going to list this with a realtor and if it doesn’t sell, we’ll accept less money.” It’s that simple.
In some cases, a short sale is an option agreed upon by borrowers and lenders. In a short sale, the home is sold for less than the outstanding balance of the mortgage. The unpaid balance (known as the deficiency) may or may not still be owed by the borrower. This option typically takes some time, as a few different lending institutions may own the mortgage. There also may be multiple lines of credit that are attached to the property, which can complicate things. All parties who have a stake in the property must agree to the terms of the sale, and a potential deal could fall through if even one lender doesn’t agree.
Short Sale vs Foreclosure – Your Options
While both options can have ramifications, a short sale often has less of an impact on the borrower’s creditworthiness. A foreclosure could impact a borrower’s credit score by 300 or more points! That’s a massive hit! A short sale may only dent the credit score by 100 points! If you’re considering short sale vs foreclosure, this is a key point to take into consideration! Take the route that’s going to protect your credit! That’s a smart move!
Borrowers who are foreclosed on are often ineligible to purchase another home for 5-7 years with a traditional mortgage, where under certain circumstances, a short sale borrower can purchase immediately.
As many Americans struggle with an economy that has yet to completely recover from the recent crash, folks are having a hard time making monthly mortgage payments. Choosing between being foreclosed and initiating a short sale (or a 3rd option… selling your Greenville house fast ) is an easy choice for a borrower having trouble paying their mortgage on time. Pitt Home Buyers can help you stop foreclosure in Greenville, NC so you can move on with your life.
Sometimes, lenders are willing to work with borrowers to complete a short sale, to avoid the fees and time-consuming process of conducting a foreclosure, but not always. Know and understand your options.
Our suggestion is always this.
- Talk with your lender and discuss ways that they can work with you on your loan. We offer this service where we can help guide you in the right direction if you run into issues with your lender… just reach out to us on our Contact page and we’ll discuss your situation.
- Attempt a short sale or other programs your lender may have that forgives part of your loan, creates a new / more affordable monthly payment so you can get back on your feet, etc. This is called restructuring. Countries around the world do is for debt that’s lent to them, so why can’t you?
- If the bank isn’t willing to work with you… your best option may be to sell your house fast in order to stop foreclosure. Work with a local real estate home buyer service like Pitt Home Buyers to sell your house fast for an all-cash offer. If you’re interested we can look at your situation and make you a fair offer on your house within 24 hours. Just fill out the form on our website over here >>
- Foreclosure. The last resort is to let the house fall into foreclosure. This is the worst possible scenario. It’ll harm your credit and you could still be left with money owed to the bank even after the foreclosure is finished.
By knowing your options, you may be able to dodge a significant impact on your credit score, allowing you to purchase a new home when your situation improves. A foreclosure on your credit report makes that possibility extremely difficult for 5-7 years, so if you have the opportunity, a short sale can be the better option.
Have a pending foreclosure? We’d like to make you a fair all-cash offer on your house.