As you’ve likely seen in the news recently foreclosure rates are on the rise for the first time since 2015. This means that many more homeowners and buyers are actively seeking solutions and answers to their questions regarding foreclosure in Baltimore. However, before foreclosure there is pre-foreclosure…
So what is pre-foreclosure in Baltimore anyway?
Unfortunately, homeowners throughout America and in Baltimore are finding it difficult to make their monthly mortgage payments.
Typically, when a homeowner or mortgage holder misses more than two months of mortgage payments, the lending institution will issue a warning notifying the homeowner that they will lose their home if they do not bring their mortgage current. This period is known as “pre-foreclosure.”
The amount of time that mortgage lenders and banks will require the homeowner to bring their mortgage current before beginning the foreclosure process will vary depending on the situation and lender. However, Maryland does have foreclosure guidelines in place that lenders are expected to follow. Therefore, it is important to reach out for support at the first sign of financial difficulty.
When a homeowner fails to make the required payments, the bank will be forced to foreclose on the property, assume ownership, and evict the homeowners. Going through foreclosure also has a significantly negative impact on one’s credit score. Fortunately, during the pre-foreclosure stage, the homeowner has the opportunity to take advantage of several options to either prevent losing their home and/or the ability to reduce the negative impact on their credit score if they must leave their home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic. Lenders often incur significant costs when completing the foreclosure process on a property so they may be willing to work with those in default to bring the mortgage current in order to avoid foreclosure.
Therefore, you have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house or that the property is currently worth more than what you owe) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local Baltimore mortgage broker… or contact us and we can connect you with a reputable one who is familiar with the local market.
- You may be able to quickly sell your home to a real estate investor that’s reputable in Baltimore like us at Creo Home Solutions, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments. We can buy your Baltimore, MD area home quickly, as-is, sometimes in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. However, in some short sale situations you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan. This is something to discuss directly with your lender.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage. This option is often a last resort as you will loose both your home and your good credit standing. However, if you must declare bankruptcy, there are ways to rebuild your credit score over time.
Lenders work with homeowners facing financial troubles across the country and they’re willing to work with borrowers a lot of the time. Mainly because it is easier and more cost effective for lenders if homeowners can continue paying their mortgages. So lenders do have their own incentives for wanting to work with you in preventing the loss of your home in Baltimore.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least encounter minimal damage to your credit rating.
A foreclosure can often negatively affect your credit score and can prevent you from obtaining a loan of any sort for 5-7 years, so be sure to evaluate your available options if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution by working directly with your lender… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with completing the short sale process in Baltimore – Submit your info on this website so we can evaluate your situation to see if we can help. We can connect you with the right Baltimore short-sale professionals to assist you through this process.
- We can buy your Baltimore house fast – We buy houses in Baltimore and would love to make you an all-cash offer on your house. Simply fill out the short form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you still have time to find a solution that will either allow you to keep your home and/or limit the potential damage to your credit score.
First, connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to receive our free Baltimore foreclosure resources.