“If I’m behind in payments…will I be giving my house back to the bank in Massachusetts ?”
Nobody wants to lose their home. But sometimes financial circumstances can take it’s turn for the worse and certain financial commitments become simply too much to manage.
If your situation escalates too far, you may be forced into the last resort of having to give your house back to the bank in Massachusetts , leaving you temporarily without a place to stay. In addition, there may be long-term consequences, including a dramatic long-term impact on your credit (and your ability to get a house in the future) including your ability to rent in a desired location because most landlords rely heavily upon credit rating.
No one wants that. That’s not an ideal outcome. Fortunately, there is a strategy you can take today to help you proactively protect yourself and get back on track to financial solvency.
Here’s a brief overview of the foreclosure process
The foreclosure process can vary depending on the state and the type of mortgage you have.
Usually, in Massachusetts, if you miss a few mortgage payments, your loan company will start sending you notifications and after 90 days you receive a notice of default. You’ll then be granted a 150-day right-to-cure period where you can cure the loan by paying all past due amounts and fees,… if you fail to pay back the mortgage payments you missed, the loan company then files a complaint at the county courthouse and will request judgment of foreclosure. If the judgment is issued the home will typically be sold at auction or through a short sale.
How long you can stay in your house after it is sold at an auction depends on the state where you live. At some point, however, you will need to find a new place to stay. In Massachusetts, you will typically have a ten-day period before the new owner will have to go through the legal process of eviction.
Fortunately, you have options!
If you wait until your home is foreclosed, it can have a devastating effect on your credit rating. One option to protect yourself is to work out an arrangement with the loan company called a “deed in lieu of foreclosure”.
This is when you hand over ownership of the house to the loan company so that they save the money they would spend on foreclosure proceedings, which can be significant. And you get to avoid having a foreclosure listed on your credit rating.
You can also avoid foreclosure by selling your house before it’s lost at the auction. If your loan is paid in full then there will be no more penalties against you and your credit rating. (If your loan isn’t paid in full you will need to make up the shortfall).
Here’s an example: Let’s say you owed $100,000 on your home and you sold your home to us for $90,000. You would give that money to the loan company, along with $10,000 to make up the shortfall, and your loan would be paid off. (If you contact a real estate attorney, you may be able to negotiate a deed in lieu of a foreclosure deal in which the loan company agrees not to go after the difference in exchange for the deed to the house.
At Atm Home Buyers Inc, we’re professional real estate investors. Contact us today at 508-257-1503 to find out what we can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in Massachusetts !
Why do people choose to sell their home instead of going through foreclosure? (After all, they still don’t live in their home anymore.)
Well, losing a home can be difficult but the impact on your financial situation and your credit is considerably less than if you simply wait out the foreclosure process. In fact, going through foreclosure could impact your credit score by as much as 100 to 150 points. So the short-term challenge of selling your house is still a better choice than the long-term pain of giving your house back to the bank.