Received an Ulster County Pre-Foreclosure Notice: What Now?
An Ulster County pre-foreclosure notice is the final warning from a lender that an Ulster County homeowner needs to get their finances in order. With an Ulster County pre-foreclosure, the homeowner is already at least two or even three months behind on their mortgage, and the bank is starting the process to foreclose on the home. There are a few different options for an Ulster County homeowner to take to avoid the foreclosure being complete.
Ulster County Pre-Foreclosure versus Foreclosure
An Ulster County pre-foreclosure is the beginning of the foreclosure process. This is the notice a bank will send out to a homeowner to let them know that the process has begun. While it seems like a pre-foreclosure is more of a warning, an Ulster County homeowner needs to take it seriously. This is a ding on their credit and if the foreclosure process goes through, it will be damaged even further.
Option One
One option when in a pre-foreclosure is to contact the lender and try to change the loan terms. Meeting with a bank to lay out what financial problems have caused the late mortgage payments may help to negotiate new mortgage terms.
This could be in the form of extending the loan out for a longer length of time. This will help to make the monthly payments smaller so they are more reasonable for the homeowner. The bank may also change the interest rate to be lower and even put the missed payments at the end of the loan to help the owner catch up quickly.
Many lenders are willing to work with an Ulster County homeowner if there is open communication. Most lenders do not want the process of foreclosing on a house and eventually selling it to make that loss up. It can benefit both the lender and the homeowner to negotiate the mortgage if there is good standing of previous payments.
Option Two
The second option during an Ulster County pre-foreclosure is called deed in lieu of foreclosure. Instead of allowing the bank to foreclose on the property, the homeowner willingly gives up the deed to the house. When the deed is taken over by the bank, the owner no longer owes any money, but they are also without a house.
A lender does not have to accept this offer. Many times this depends on how well the house is likely to sell and what the current housing market is like. If it will be an easy sell and the bank will gain their money back, they are likely to accept the offer.
A market that is slow or declining will mean the bank may be stuck with the property for a long period of time and out the mortgage payments. In this case, they will probably deny the offer. If a deed in lieu of foreclosure is complete, the Ulster County homeowner’s credit will not take as massive of a hit.
Option Three
The last option during an Ulster County pre-foreclosure is selling the property in a short sale. This means the property will be sold to pay off as much of the mortgage possible, and the owner will walk away from the mortgage as well as the property. The lender must agree to this process because they are often taking a loss.
In any instances where someone has fallen behind on their payments, their credit is damaged. A pre-foreclosure is no different. It is in the homeowner’s best interest to resolve a pre-foreclosure before it is completed and their credit is severely damaged by a foreclosure.
If you need to sell your Ulster County home now, call us today. Our team has years of experience in helping distressed Ulster County homeowners get out of trouble.