How To Stop Foreclosure
It is not uncommon that someone who has passed away has debts or other obligations to be paid, like taxes or installment payments. Without income or resources to pay these obligations, the situation can quickly become a burden to those who are left behind. Not making timely payments is not only a threat to the estate – it can also be truly disruptive for someone who relies on an asset to live, like a car for transportation. The loss of a house can be especially terrifying, and the period leading up to the eviction can be depressing and nerve-racking.
Foreclosure can occur when home loan payments, HOA dues, taxes, or other requirements attached to a house go unpaid for too long. In Texas, there is a streamlined process for lenders to foreclose on a house – it can go to auction quite quickly. When foreclosure happens, the current owners lose control. The government will evict the current occupants.
The house will be auctioned at a bargain price to someone, and there can be substantial additional costs that further reduce the amount of money that comes back to the owners. Any living person still attached to the defaulted loan will have serious credit problems for seven years. Ironically, this credit damage can make it harder to buy a car for transportation or to find a new place to live.
Foreclosure is a not-uncommon problem in probate situations. But foreclosure never needs to happen.
Act Early, Act Fast
Take action as early as possible. Communicate with the lender. If it’s early enough in the process, loan forbearance or loan modification might still be possible. At least temporarily, does it make sense to let renters live in the house and pay rent to make sure there is money for creditors? There are concrete steps you can take to stop foreclosure from moving forward at least temporarily – do you know how? Do you have time to market the property publicly?
You might find some value in this Texas-specific resource about avoiding foreclosure from the U. S. Department of Housing and Urban Development (HUD). It is a guide to counseling services, If you would like to talk things through with someone, please call me.
Social Programs and Charities
If it’s not going to be possible to make needed payments on the required timetable, the only sound advice anyone can give is to plan to get out from under these payments as soon as reasonably possible so that you keep more control of the outcome. The payments don’t go away, they just keep piling up and gathering penalty fees. In some cases, it might be helpful to buy yourself more time so that you can make a transition that is favorable to you. There are strategies for buying this time – and it might be a good idea for you to learn about them – but if there is no outlook for being able to afford that home, you need to get out while there’s still time. Some people are able to find less expensive accommodations or fall on a safety net of family and friends. This is the ideal situation, but not everyone can do this. I can relate to this crisis from personal experience – it’s scary.
Leveraging Other People’s Resources
Selling the house can provide the cash needed to pay off creditors. If the house is in good condition, if you still have enough time, and if the market for sellers is good, you might have the option of selling the house on the open market to get market price. If this does not describe your situation – truthfully, it’s rare – it is honestly not in your best interest to list the house. Retail buyers don’t always come through, and you can’t afford to have the deal fall apart. An investor can usually buy the house more reliably and quickly. Investors can even find creative ways to help sellers’ credit recover more rapidly, such as signing a legally-binding contract to make payments on their behalf. Both options can put more control in your court and prevent the disasters that come with foreclosure.
Please call me to discuss which options would be better for you.
