“I’m behind in payments…will I be giving my house back to the bank in Tulsa?”
Nobody wants to be evicted from their house. However, occasionally financial circumstances work against you, and those financial obligations become simply too much to handle.
If your situation worsens, you may find yourself in the unpleasant position of having to give your house to the bank in [market city] [market state], leaving you temporarily without a place to stay. Furthermore, there may be long-term ramifications, such as a severe and long-lasting influence on your credit (and your ability to get a house in the future).
That is not what anyone wants. That is not a good outcome. Fortunately, there is a method you can implement right now to help you protect yourself and get back on track to financial stability.
Here’s a brief overview of the foreclosure process
The foreclosure process can vary depending on location and the type of mortgage you have.
If you miss a few mortgage payments, your lending company will usually send you notices, followed by warnings. If you do not repay the missed mortgage payments, the loan company may sell your home at public auction.
The length of time you can stay in your home after it is sold at auction is determined by the state in which you live. You will, however, need to find a new place to stay at some point.
Fortunately, you have options!
Waiting until your home is foreclosed on can have a negative impact on your credit rating. One way to protect yourself is to negotiate up a “deed in lieu of foreclosure” agreement with the loan institution.
This is when you give the loan company ownership of the house in order for them to save the money they would have spent on foreclosure procedures, which can be substantial. You also avoid having a foreclosure on your credit report.
You can potentially avoid foreclosure by selling your home before it is auctioned off. If you pay off your debt in full, you will have no further penalties and your credit rating will improve. (If your loan is not paid in full, you must make up the difference.)
Here’s an example: Say you owed $100,000 on your home and sold it to us for $90,000. You would give that money to the loan company, along with an additional $10,000 to make up the difference, and your debt would be paid off. (If you contact a real estate attorney, you may be able to arrange a deed in lieu of foreclosure agreement in which the lending company agrees not to pursue the difference in exchange for the house’s deed.)
I want to avoid giving my house back to the bank in Tulsa!
Why do people decide to sell their property rather than face foreclosure? (After all, they don’t live in their house any longer.)
Losing a house can be difficult, but the impact on your financial circumstances and credit is far less severe than simply waiting through the foreclosure process. In fact, going through foreclosure can lower your credit score by 100 to 150 points. So the short-term struggle of selling your home is still preferable to the long-term agony of returning your home to the bank.