How to handle possible Georgetown Foreclosure on your home. 

Are you behind in your Georgetown Home mortgage payments, or concerned that you before long might be?

Have you received a bank pre-foreclosure letter from your lender?

Many homeowners are in your same situation – many times through no fault of their own. A loss of work, a serious illness, medical emergency or other circumstances can put you in danger of foreclosure.

The economic downturn has led to many Georgetown homeowners being "upside down" in their loans, meaning they owe more than the Georgetown home is worth, which makes refinancing impossible.   

If you've become one of the many, don't panic. Foreclosure, and its effect on your credit, is not inevitable. There are many options out there, and your circumstances may make one of those options desirable for you.  Ashly Wilson, Georgetown Realtors can help you! 

To evaluate your options, you need to communicate with your Georgetown lender first. Many Georgetown homeowners have lost their homes to foreclosure without ever having contacted the bank and explore their options. 

This would also be a good time to consult with a tax advisor and Ashly Wilson, Georgetown Realtors. Ashly Wilson is trained in working with distressed properties, and will be able to help you evaluate options other than Georgetown foreclosure.

Lenders would rather not foreclose on Georgetown homes. A foreclosure cost them money. Most of the time, the lenders will consider alternatives.  Several of these very well could keep you in your Georgetown home. 

Short Sales 

You’ve probably heard about short sales on the news recently. Some banks will allow a short sale, which is when the home sells for less than the amount of the outstanding loan. This can be attractive for some lenders because they lose less than in a Georgetown foreclosure. In addition, short sales are generally quicker than foreclosures, and banks don't have to carry the properties on their books.

This is attractive for Georgetown homeowners because the impact on their credit is far less than in a foreclosure. A short sale stays on their credit reports for only two years, as opposed to seven years for a Georgetown foreclosure, and many times does not prevent purchase of another home.

Short sales have quite a bit of paperwork, and many details involved. If you're considering this option, it's critical to work with a trained real estate agent who knows all the steps required to successfully complete a short sale.  Ashly Wilson, Georgetown Realtor has experience and can successfully help you complete your short sell. 

Georgetown Loan Modification

While only certain Georgetown homeowners will be able to take advantage of this alternative, it could be your best option because it keeps you in your home and preserves your credit rating.

Your Georgetown lender may be willing to modify the terms of the loan, whether it's reducing the principal, lowering the interest rate or other strategies to make the loan more affordable for you. The U.S. government has programs to provide incentives for banks that use this strategy as an alternative to foreclosure on your Georgetown home. 

 Foreclosure

 A big problem in foreclosures is that homeowners sometimes damage the property, or even sell some of the fixtures, before leaving. This is not a good idea. It may expose the homeowners to additional financial and legal liability, and makes the Georgetown properties much more difficult to sell for the lender.  

To prevent this type of damage, some lenders offer a program called "Cash for Keys." The homeowners receive a check for vacating the property within a certain time period and leaving it in good condition. If you have no alternative other than Georgetown foreclosure, you should ask your bank about this. 

What HUD has to say?

The U.S. Department of Housing and Urban Development has 10 tips for avoiding foreclosure:

1.     Don't ignore the problem.

2.     Contact your lender as soon as you realize you have a problem.

3.     Open and respond to all mail from your lender.

4.     Know your mortgage rights.

5.     Understand foreclosure prevention options.

6.     Contact a HUD-approved housing counselor.

7.     Prioritize your spending.

8.     Use your assets.

9.     Avoid foreclosure prevention companies.

10.   Don't lose your house to foreclosure recovery scams.

 Mortgage and Georgetown Foreclosure Terms

 Adjustable Rate Mortgage (ARM): A mortgage loan or deed of trust that allows the lender to adjust the interest rate. The rate change is agreed to at the inception of the loan.

Amortize: Repayment of debt with payments of both principal and interest calculated to pay off the debt at the end of a specified time period.

Balloon Mortgage: A mortgage with installments of principal and interest that do not fully amortize the loan. The balance of the mortgage is due in a lump sum, usually at the end of the term.

Buy down Mortgage: A mortgage with a below market interest rate that results in lower monthly payments. A buy down is made by the lender in the form of "points" in return for money received from the builder, seller or homebuyer.

Cash for Keys: A deal a lender may make with a homeowner. The homeowner gets cash settlement in exchange for vacating his/her foreclosed home and leaving the home in good condition.

Convertible ARM: An ARM that may be converted into a fixed rate mortgage within an agreed-upon time period. There is usually a fee when the loan converts.

Deferred Payments: Payments the lender agrees to postpone as part of the workout process when facing foreclosure.

Equity: The net value of an asset. In terms of your home, the difference between the value of the property and the amount you owe on the mortgage.

Escrow: Sometimes called impounds or reserves. Money or documents deposited with a third party to be delivered upon fulfillment. For example: a borrower deposits money with the lender to pay taxes and insurance on a property when they become due.

Fixed-Rate Mortgage: A mortgage where the interest rate and payments remain the same for the life of the loan: typically 15 or 30 years.

Forbearance: An arrangement in which the lender agrees not to take

Legal action if a homeowner arranges to pay the amount owed on a mortgage by a specified date.

Foreclosure: A legal process where a mortgaged property is sold to recover the amount owed.

Refinance: The payoff of an existing loan with a new loan using the same property as security.

Repayment Plan: An arrangement in which the borrower makes additional payments to pay down the past-due amount while still making regularly scheduled payments.

Workout: Also called restructure. An alternative to foreclosure. Can include loan modification, short sales or forbearance.

Ashly Wilson, REALTOR Georgetown
1611 Williams Drive
Georgetown, TX  78628
AshlyWilson@gmail.com
Cell 512-508-0623
Office 512-930-4663
Fax 512-930-3299