If youâ€™re trying to stop foreclosure on your Los Angeles home, youâ€™re in good company. Right now in Los Angeles County, about one out of everyÂ 1000 homes is in preforeclosure or some stage of the foreclosure process. For homeowners who are trying to preserve their credit ratings, it is important to do what you can to avoid foreclosure.
Â Foreclosure has a devastating effect on your credit, and will make getting another mortgage difficult for about five years. Sometimes, there are few alternatives to foreclosure, or the lender will prefer foreclosure over any other option. From the homeownerâ€™s perspective however, itâ€™s worth the effort to prevent foreclosure when at all possible, despite the lenderâ€™s preferences.
The preforeclosure stage offers the widest array of options to correct mortgage trouble. A conventional sale, a mortgage reduction, or a short sale can all stop foreclosure. A deed in lieu of foreclosure is usually a strategy that is employed only when other less drastic efforts to prevent foreclosure have failed.
Once foreclosure proceedings have begun, mortgage reduction will be less successful as a way to avoid foreclosure, but an active foreclosure action doesnâ€™t eliminate the mortgage reduction option. A short sale is more likely at this stage, but can succeed only if the seller has a bona fide purchase offer, and the homeowner is not carrying multiple mortgage loans.
If a short sale process is underway, the lender will typically withdraw, delay or stop foreclosure proceedings until it determines whether the proposed short sale or a foreclosure will best minimize its loss. Short sales can take a long time and require a significant amount of the negotiatorâ€™s time and effort. This is why itâ€™s in the sellerâ€™s best interest to let experienced loss mitigation professionals handle the short sale negotiations.
If the short sale fails, the seller may offer a deed in lieu of foreclosure. At this point, the lender will know whether or not accepting the deed will result in a savings. The real danger for the homeowner is that the lender (or the lenderâ€™s investors) will benefit from a foreclosure. In this case, there is no way to prevent foreclosure.
Working with professional loss mitigators is the homeownerâ€™s best option to stop or avoid foreclosure. If youâ€™re at risk of foreclosure, contactÂ Blue Group AssociatesÂ today. Our professional negotiators can help you avoid foreclosure with mortgage reduction services, short sale services or by facilitating the cash purchase of your home.
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Photo Credit: R. Batina