Distressed Properties
What exactly makes a property distressed? Distressed properties are those that are available for sale because of financial hardship on the part of the owner. There are a variety of different types distressed property sales: REOs, short sales, foreclosures, and physically distressed ("as is") homes. Have you received a notice of default and don't know where to turn? Do you need a cash buyer who will purchase your home without repairs? Call me. I am a certified short sale and foreclosure specialist, and I'm here to help.
Options for Distressed Borrowers
WHO WANT TO KEEP THEIR PROPERTY
REFINANCE
This is the process to change the current interest rate and/or terms of your mortgage. One option is the Home Affordable Refinance Program (HARP). This program can drastically reduce your monthly payment. Reducing your interest rate also allows you to build equity in your home more quickly.
LENDER WORKOUT
Lenders will occasionally work with borrowers to forgive back payments, add them to the loan amount, or possibly re-cast the entire loan. Don't be scared to call your lender or consult with an attorney.
Have you already looked into these options and want to discuss listing your home instead? Fill Out This Form
NOTICE OF DEFAULT
An official note from the servicer to the borrower stating that the borrower has defaulted on the mortgage. It typically gives the homeowner 90 days to pay off the most recent bill. This formally begins the foreclosure process.
NOTICE OF SALE
If, after receiving the notice of default, the borrower does not, or is unable to, reinstate the loan, a notice of sale is recorded. The notice of sale explains when and where the foreclosure sale will be held.
REINSTATEMENT PERIOD
This is the time specified in the notice of default. The borrower can make all of their outstanding payments along with any late fees or expenses incurred by the servicer, bring their account to current, and no longer be in default. In Colorado you have up to 15 days before the sale to reinstate the loan.
REDEMPTION PERIOD
The redemption period is typically the time after the foreclosure sale that allows the owner the ability to redeem the property.The redemption period in Colorado is three years.
WAITING PERIOD
to finance your next home
If your property is foreclosed on, for Fannie Mae & Freddie Mac, you will likely have to wait 7 years to finance another
home. If you sell your property in a short sale, for Fannie Mae & Freddie Mac, you will likely have to wait 4 years.
Options for Distressed Borrowers
WHO CANNOT STAY IN THEIR PROPERTY
SELL AND BRING CASH
TO CLOSING
Some borrowers may have the ability to pay off all of the debt. Choosing to do this rather than a short sale (or foreclosure) will likely protect your credit and ability to purchase a home in the future. Click here for a free Comparative Market Analysis and Estimate of Equity
SHORT SALE
A short sale occurs when (1) a homeowner sells their home, (2) the proceeds of the sale are not sufficient to pay off the mortgage lien(s), and (3) the seller does not have the funds to bring to closing. All lien holders must accept less than what is owed to them.
DO NOTHING AND GO TO FORECLOSURE
Foreclosure is a legal process by which a defaulted borrower is deprived of their interest in the mortgaged property. When you default on your mortgage, you are in pre-foreclosure. Please reach out for more information on the foreclosure process and to discuss your options today.