Foreclosure is a difficult process for any homeowner.
Proceedings start once a person has not made either
payments or acceptable arrangements for payments for over
90 days. In California, it is estimated that nearly 12 out
of every 100 properties is in some stage of foreclosure.
There is, however, a way to stop the process.
When a bank begins foreclosing on a property, they are
looking to re-coup their original loan by assuming the
value of the property and then selling it again. This is a
lengthy process a bank would much rather avoid. It would
much rather agree to a sale, even at a loss of the original
loan amount. A cash home buyer can likely complete a
transaction with the homeowner that will stop the bank from
moving ahead.
The ideal scenario for selling a house takes place when a
homeowner decides he or she will make a tidy profit and it
is time to move on. The vast majority of sales work this
way. A small percentage, however, are caught in
foreclosure, where payments are unable to be met and the
bank seizes the property.
The fastest way for a property to avoid foreclosure is
through a sale to a cash buyer. The amount of the sale can
then be used to pay off the loan and penalties. Even if you
owe more than the house is worth, a bank will be much more
willing to negotiate in good faith at this point and accept
far less to avoid getting the house back; this is known as
a short sale and is very effective in a depreciating market.
The State of California uses a system of nonjudicial
foreclosures, meaning that no court order is required to
begin proceedings. The Notice of Default is filed with the
county courthouse and delivered to the homeowner at the
same time. This invariably speeds the process along, giving
a distressed property owner less time to either raise money
or work out an agreeable arrangement with the bank. When
homeowners manage to stop a foreclosure proceeding in the
state of California, they are also protecting their credit
rating. Should they wish to return to the housing market,
other lending agencies will not see the black mark of
foreclosure on their credit reports? Otherwise, it can take
seven years for a foreclosure to disappear from a person's
credit history.
There are companies that are able to complete quick
transactions for sellers that are either simply tired of
their property being listed with no sale or facing
foreclosure. The offer price will be lower than a seller
would like, but if they are facing a foreclosure process,
the long term savings to credit and reputation can be
incalculable.
Copyright Property Partners, LLC 2007
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http://www.property-partner.com/library.htm .
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