Helping Pasadena Homeowner’s in Foreclosure

About 650 Homes in Pasadena are in some stage of the Foreclosure process

If you are a homeowner, the word foreclosure can send chills up your spine. It can be an intimidating process simply because you don’t know what to do, where to turn or what help if any is available. Now is not the time to become timid, but rather this is your opportunity to be proactive and explore the options you have available to you. Don’t be misled, the clock is running. The actions you take today may help you keep your home or at least delay the foreclosure process.

Investigate Your Options

If you have been late on your monthly mortgage payments, you are likely to receive phone calls from your lender as well as notices in the mail. DO NOT IGNORE THIS! I an assure you that inattention will not make it go away. You absolutely need to develop a line of communication with your lender. All of them. If you have a second on your home, discuss your situation with them as well. Get the name and phone number of the person you speak with and tell them you would like to discuss a loan modification. The State of California recently announed a 90 day moratorium on foreclosures. Also the Obama administration just increased the loan ratio’s to help more homeowner’s qualify for this program, since the previous ratio’s were too tight and did not offer much assistance for California home owners. These programs seem to be changing quickly with new ones being offered and exisiting ones being altered.

The Short Sale Option

If a loan modification cannot be worked out, there is still an alternative to foreclosure. It’s called the short sale. This happens when the market value and corresponding purchase price are less than the balance owed on the property. A short sale will more than likely offer you a better alternative than a foreclosure. Its been reported that it will have a much less negative impact on your credit score than a foreclosure and if an offer is submitted to the bank they may halt the foreclosure process long enough to consider allowing you this option. One thing however, just because you agree and accept an offer, it is still contingent upon the banks final approval.

The unique benefit of a short sale is there is usually no increased cost passed on to the homeowner. The bank will typically agree to pay the title and escrow fees, the real estate commissions, back taxes, HOA dues, city transfer fees and maybe some miscellaneous expenses. Now I will also preface that by saying this may depend on how your loans are structured. If you have a first and a second, one of the parties to the transaction (buyer or seller) may be asked to pay a contribution which is usually in the form of $3000 (example) to payoff the second lien holder which in many cases is likely to receive nothing other than a total write off.

The Paper Trail

Navigating the short sale process can be very cumbersome for the uninitiated. Dealing with the banks who may not return calls or the mountain of paper that must be submitted can be overwhelming if you are not prepared. The short sale submission package will usually include a hardship letter (why you have to sell and cannot pay the mortgage), pay stubs, bank statements, tax returns, and your mortgage statement.

All that is left is the waiting & waiting. A short sale I am involved with took about two months to provide an approval and this is one of the better banks to deal with. Then add another 30 day escrow period.

Summary

There is no doubt that this can be a very stressful time for you. However the worst thing you can do is to not do anything. We would be glad to come out and review your situation and discuss your options. I guarantee you it will be a very informative and productive meeting and I would welcome the opportunity to meet you. Please give me a call at 626-432-4615 or email me.