How Home Investors Can Help You Prevent Foreclosure

How Home Investors Can Help You Prevent Foreclosure house for sale

One of the best ways to prevent a foreclosure is to sell your house to a home investor. This helps pay off a mortgage fast. Though handling your mortgage this way still means losing the home, your credit isn’t as impacted, and you may even walk away with money to start over again.

Reputable home investors are perfectly positioned to help you. To understand why, you first need to understand the Texas foreclosure process.

The Stages of Foreclosure

The Texas foreclosure process moves very fast, and you must move quickly too if you want to respond. If you don’t, it can take as little as 41 days for you to lose your home.

The first step in the foreclosure process is the receipt of a “Notice of Default” letter. This letter tells you that the loan is in default. The lender typically tries to call you and send mail you to remind you of missed payments prior to sending this notice.

Your options at this point are to bring the loan current within 20 days, look for a loan modification, or  declare bankruptcy. You can also start thinking about selling your house at this point. However, if you want to keep your house, consider a loan modification before taking any drastic steps.

In 20 days, there will be a “Notice of Sale, Filed and Posted.” At this point, you are just about out of options. The home will be sold just 21 days after the receipt of this second notice. After the home sells, you can and will be evicted. The lender will also “accelerate” the loan, which means that the only way to stop the proceedings is to pay the whole thing off, not just the several months worth of unpaid payments that the lender will be asking for in the default letter.

Remember, allowing a foreclosure to proceed all the way to a sale and eviction will make it harder to find a new place to live. The foreclosure will be on your credit report, and when it comes to finding new housing that mark on your record can make things difficult.

Selling Your Home

If you decide to sell your home you’ll have two options.

The first option is a “short sale.” This means you will sell the home for less than the amount owed on the mortgage. This is typically the last resort of people who are upside down in their homes; they may sell the home at market rate yet still end up with a balance that will need to be paid.

Your lender must approve the short sale, and here’s where things get sticky. It can take them up to 120 days to make the decision. Unless they decide to halt the foreclosure proceedings you may not get an approval before your deadline. If you think you might want to do a short sale, start talking to your lender the moment you’re in trouble.

While short sale approvals typically take time, banks do move a little faster for a cash sale. Short sale approvals typically take time. In this case, a second lender offers a mortgage to someone else to buy the house. As home investors, Big State Home Buyers has presented banks with attractive terms that helped expedite approvals.

However, you don’t even have to go through this pain if you’ve got enough equity in the home. If you owe $70,000 on an $150,000 home, we may be able to offer you enough on an as-is cash sale. This helps pay off the rest of the mortgage. Additionally, it gives you some money for starting over. Depending on how much you owe you may have enough money to escape foreclosure and put down a deposit or first month’s rent on a new apartment, make a down payment on a new and more manageable mortgage, or even to purchase a small condo or townhouse for cash. Either way, you’ll be far better off than if you allow the foreclosure proceedings to take you all the way to an auction and eviction.

How Fast? Real Fast.

The good news about selling your home as-is to investors like us is that we can get an offer to you very quickly. You’ll have an offer in your hands in as little as 24 hours. We can have the closing complete in a week. We even give you time for packing so you can move on to your next home.

Can you buy the home and sell it back to us?

Sadly, no.

If we helped you out with a fast short sale then you’ll be asked to sign an Arm’s Length Affidavit at closing. That’s a lender requirement. They don’t want you benefiting financially from the short sale. Attempting to remain in the home after a short sale is a form of mortgage fraud.

If you’re facing this scenario it’s best to look at this as a chance to downsize and realign your finances. A better, brighter financial future awaits. You have a chance to rebuild within your current means. Trying to hold on to a house for too long is one of the biggest mistakes we see homeowners make. If you get into financial trouble…don’t let this mistake trip you up.

How Big State Helped One Homeowner Prevent Foreclosure

Each situation is a little bit different, but here’s how Big State Home Buyers was able to help Kate, a homeowner who was right on the edge of foreclosure before she reached out to us.

Kate was behind on her payments, and her mortgage company refused to negotiate. She came to us, and when we learned the situation we got straight to work. First, we received an authorization from Kate to negotiate on her behalf. Then, our title processor, Sonya, started negotiating with the mortgage lender. This is what happened, as told by Sonya:

“We solved that case at the last very last minute. They were using deceptive methods to force the homeowner into a very short window to avoid foreclosure, giving us only a window from the 19th of November to the 30th.  They weren’t budging.

First I sent the authorization, and I sent that separately, because I didn’t want them to think I was only asking for a pay off. Then, I resent the whole package: I sent my request letter, the authorization, the contract and my proof of funds. I make sure that whatever the amount the homeowner is short, that my letter says clearly that we have enough money to pay for the foreclosure and the bank can rest assured that they will get every dime owed to them. Big State has a line of credit that I’ll send with my request to postpone foreclosure.”

Home Investors Give You an Essential Edge In Negotiation

This is a key reason why working with a home investor gives you an essential edge in negotiation. With a home investor, you go from being completely at the mercy of the bank to having a great deal of leverage in the form of the investor’s capital. Working with an investor puts you in a much better position with your creditor.

Having sent her documents to the mortgage company, Sonya got them on the phone:

“I always get a name, and I notate the system, notate the file folder of who I spoke with, if there’s an agent ID I get that information, I make detailed notes every time. That is what will save you, and it saved us in this circumstance. We were in negotiations for weeks, and they repeatedly said there was no fixed foreclosure date. But then out of the blue they said that there was, and it was imminent. They did this to rob the homeowner of the opportunity to avoid foreclosure in time.

When I called, they said, ‘No, we didn’t say that we didn’t have a foreclosure date.’ And I said, ‘Actually on the 19th you said you didn’t have a foreclosure date, agent ID number 244233 said they didn’t have a foreclosure, agent 12442 said they didn’t have one, and here we are on the 21st and you’re saying it’s a foreclosure date and it’s this month.’ So I said, ‘You said our conversation is recorded right? Please pull that tape. Because you had 4 agents that told me that there was no foreclosure date, and now you’re saying it’s in 10 days. Pull that tape.’ And that stopped the foreclosure just for them to pull it. First they stalled for days just to find the tape, and that window alone gave us all the time we needed.”

Closing On The Property

Sonya went on to explain,

“The funny thing is, in the time it took for them to pull the tape, we didn’t even need the postponement, we just needed a few days to close it out. We didn’t even need for them to postpone because we found a buyer for the home in that window and it was ready for purchase.

Then they finally called back, and they said, ‘Okay, we’re going to pull the tape.’

I said, ‘Wait a minute’, and I grabbed my recorder and recorded it on the phone.

I said, ‘Please repeat the agent ID, please repeat whether or not it’s a foreclosure date.’

He said ‘Nope, it’s not a foreclosure day.’

I said ‘Please repeat your agent ID again’, and he did, and I said ‘Okay. I just want you to know that you have been recorded, in stating that there is no foreclosure.’”

After that ordeal was finished, we closed on the house. Kate had the money she needed, moved to San Antonio, and started a new life and career.

So to recap, here’s the path we recommend for halting foreclosure:

  1. Find a reputable home investor with experience in negotiating with lenders, and authorize them to negotiate on your behalf.
  2. The investor negotiates with the lender while at the same time finding a buyer for your home.
  3. Once a buyer is found and the lender agrees to release, you sign your house to the new buyer, get your payment and breath a sigh of relief.

You may now be wondering,

“Why can’t I just take this advice and negotiate with the lender myself?”

The reason we don’t recommend doing that is because your lender is not motivated by your story. They are motivated by money. You would need proof of funds to have leverage. Our company happens to have that proof.

Most lenders are actually ecstatic to work for us. You see, banks are not in the real estate business. For them to foreclose a property, they have to winterize the property, they have to lock it down, hire inspectors, put it back on the market, and clean it, and hire lawyers. It can take as much as $30,000 to foreclose on a property, so most banks are happy to work with us. It’s easier for them to get the money they’re due than it is to sell the property again. They’re in the business of making profit on interest through financial services, and selling houses is just a speed bump the bank would rather avoid.

Not All Home Buyers Are the Same

We hope this advice was helpful. Keep this in mind too: not all home investing companies are the same. Many companies in our business don’t have the tools or the resources to do what we do. They simply buy and sell houses. What we offer is a bit out of the ordinary. With Big State, you’re working with a company with a unique combination of available cash and negotiation experience that make us a powerful ally if you need help beating the bank.

Our final piece of advice: don’t stay in a house that’s too expensive for you. Live within your means. If you’re facing foreclosure, be wary of predatory loan modifications that sound like the perfect solution. Never take bankruptcy advice from someone who isn’t a lawyer. If you’re really underwater, take this opportunity to work with someone like us so you can downsize and bring your financial house back in order. We want to help, but we can’t do that until you call. No problem is too big, we’ve seen it all.

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