With millions of homes nationwide entering foreclosure, it’s crucial for both buyers and homeowners to grasp the process.
So, what exactly is a pre-foreclosure in Lehigh Valley?
Numerous homeowners throughout the country, including those in Lehigh Valley, are struggling to keep up with their monthly mortgage payments.
When a homeowner falls behind by 3-6 months on payments, the lender typically issues a warning, alerting the homeowner that they must pay or risk losing their property. This stage is referred to as “pre-foreclosure.”
Generally, banks and mortgage lenders allow a three-month window for the homeowner to catch up on payments, although this timeframe can vary depending on the lender and specific circumstances.
If the homeowner fails to make the required payments, the bank will proceed with foreclosure, taking ownership of the home and evicting the occupant. Fortunately, during the pre-foreclosure stage, mortgage holders have several options to avoid losing their homes.
Pre-foreclosure Options for Borrowers
If you’re falling behind on your mortgage payments, it’s highly probable that you will receive a “notice of default” from your lender.
This official document serves as a formal notification that you have not made your mortgage payments for the past 90-180 days, signaling that your account is now considered delinquent. Receiving this notice can understandably be a source of stress and anxiety, but it’s crucial to remain calm and composed during this challenging time. Recognizing that this is just one step in a process can help you maintain perspective and approach the situation with a level head.
Instead of panicking, take this opportunity to assess your financial situation, explore your options, and consider reaching out to your lender to discuss possible solutions. Remember, there are alternatives available that can help you navigate this difficult period. Staying proactive and informed is key to finding the best path forward.
You have several options to delay or even prevent foreclosure:
- If your mortgage is “above water” (meaning you have equity in your home), you might be able to refinance, which could lower your monthly payments. Consult a local Lehigh Valley mortgage broker, or contact us to connect with a reliable one.
- You could quickly sell your home to a real estate investor in Lehigh Valley, like us at iBuyLehigh. You can use the cash obtained from the sale to cover any overdue payments. Alternatively, we might be able to negotiate with your lender to help relieve some or all of your back payments. We can buy your Lehigh Valley PA area home quickly, often in just a week or two, paying cash and alleviating the stress of searching for a buyer.
- Consider reaching out to your bank to request a short sale. This option allows you to sell your home for less than its market value, with the bank accepting the loss as a tax write-off. Be aware that, in some cases, you may still be required to pay the difference if the sale price doesn’t cover the loan amount.
- Filing for bankruptcy may be an option, as it can provide additional time to address your debts. However, bankruptcy will remain on your credit report for several years and can significantly impact your credit score.
Lenders are generally aware of the financial challenges facing many borrowers and are often willing to collaborate on solutions.
By being honest and maintaining communication with your lender, you may discover options that allow you to stay in your home or at least protect your credit rating.
Remember, a foreclosure can severely damage your credit score by 200-400 points and can hinder your ability to secure any loans for 5-7 years, so take immediate action if you receive a Notice of Default.
If you can’t find a resolution by working directly with your lender, connect with us. We may be able to assist you.
Ways We Can Help If You’re In Pre-Foreclosure
- We can assist with a short sale. Submit your information through this website for us to evaluate your situation and see how we can help.
- We can buy your Lehigh Valley area house—we buy houses in Lehigh Valley and would be happy to make you an all-cash offer on your property. Just fill out the form here to get started >>
- You can ask us questions, and we will provide you with FREE guidance and resources to help you make an informed decision. This service comes at no cost to you, with no pressure or obligation—just free advice without any strings attached.
If you find yourself in the pre-foreclosure stage, there’s still time to address your situation.
Reach out to your bank to see if they’re open to working with you, or contact us to explore what we can offer for your home or access our free foreclosure resources.