Avoid Foreclosure Thornton

Before you even start thinking about how to avoid foreclosure Thornton, you’d be better off trying to understand what foreclosure really is first.

It’s only after you have a better understanding of foreclosure alongside the stages and phases involved that you can actually work out a solution to avoid falling into it.

What is foreclosure?

In simple terms, foreclosure is the legal process that a lender uses to repossess or sell a home when the owner is no longer able to make the monthly mortgage payments as per the loan agreement. As a homeowner, you will be in a better position to avoid foreclosure Thornton if you understand the individual steps involved in the foreclosure process as this will help you understand your responsibilities and rights as a homeowner.

In Colorado, a lender doesn’t need to go to court in order to proceed with the foreclosure process. This is known as non-judicial foreclosure.

Phase one

In Colorado, a homeowner must fall three months behind on their monthly mortgage payments before a lender can legally start the foreclosure process. So, if you have missed two months of payments already, your house is not yet in foreclosure, but this doesn’t mean you do nothing. In fact, this is the best time to start working on how to avoid foreclosure because the number of options is huge.

If you are in this stage, the best thing is to contact your lender and work out an alternative to how you’ll make the missed payments and get to the current payment. This is the time you might want to think about selling your house fast in order to get the funds to clear the owed mortgage.

Phase two

After the missed payments’ stage, you’ll now enter the pre-foreclosure stage. This happens once you are past three months of missed payments and it’s when the lender is legally allowed to proceed with foreclosure. This is the time the lender will serve you with a notice of default – and it’s time you should be worried about the increasing prospects of losing your home. Still, this period will afford you some more time to work out on how to repay the loan, be it with your lender or on your own.

Phase three

If you can’t work out on a solution within three months after you received the notice of default, the lender will schedule a date for auctioning the house. As the homeowner, you will also be informed about this decision to auction the house, but you still have the right to redemption where you can come up with the owed money and stop the foreclosure process. However, your time is limited up to the moment the house is sold.

In short, once the house is sold in the auction, even coming up with the money you owed the lender will not get your house back. Since auctions require cash money to be paid, many lenders end up buying back the house themselves because not so many individual buyers can afford to pay cash. In other cases, the lender may voluntarily surrender the house back to the lender by signing what is known as a deed in lieu of foreclosure.

Phase four

The last stage of the foreclosure process, as you may have guessed, is post-foreclosure. As pointed out, auction sells usually require buyers to pay in cash. Since not so many third parties out there can afford to raise the amount of money need to pay for a house in cash, the lender may eventually take ownership of the house. This changes the property into a bank-owned house or rather Real Estate Owned (REO), suggesting that the property is owned by a lender.

When a property enters this phase, the lender has only two options to get back their money. They can either sell the house at an REO liquidation auction that is usually held in auction houses, at the property or at convention centers; or they can choose to list it with a local real estate agent for anyone willing and able to buy.

As you may have noticed, the lender will eventually sell the house in order to recover their money. So, if you really want to avoid foreclosure Thornton and you think that your financial woes won’t be ending anytime soon, the best thing is to sell the house fast to a real estate investor. In this way, you will get the cash you need to pay back what you owe and keep some for your next move.