Foreclosure
Clarity is what you need, not fear.
When you are behind on your mortgage, uncertainty can be just as stressful as the financial hardship itself.
Questions that must be answered
- How much time do I have?
- What is the next step?
- Is foreclosure inevitable?
- Who can I talk to for honest, accurate information?
- Should I go bankrupt?
- Where am I going to go if I am foreclosed on?
- Can I stay somehow?
- Can I sell the property before foreclosure?
Each lender may have different policies at different times. Each loan, each house and each borrower is somewhat unique. The lenders have rights, and so do you.
I have outlined the steps and general timelines below. The best approach is to know the details and communicate with anyone who can help.
What foreclosure is
Foreclosure is a legal process a lender resorts to when you fail to make a monthly payment for more than 180 days. Lenders prefer to avoid foreclosure if they can.
Virginia is a deed of trust state. Real estate loans made in Virginia use a deed of trust at settlement. Some states do not use deeds of trust. Deed of trust foreclosures are handled at an auction and do not require going to court.
If notices of late payments and foreclosure are properly sent, and a loan is more than 180 days in arrears, the lender can sell the property to pay off the loan at an auction.
Lenders prefer to get paid and do not want to foreclose unless they do not see any other way to be paid. Borrowers have options during this process, and the lender will usually attempt to find a solution to avoid foreclosure.
The lenders’ rights and the borrowers’ rights are written in a settlement document called a deed of trust. An attorney or an experienced real estate broker can be helpful to clarify the borrower’s rights and the deadlines, and to negotiate with the lender.
The foreclosure timeline
The following guidelines are general and exceptions can be in effect. Each lender may have different policies and practices.
| How far behind | What happens |
|---|---|
| 1 to 15 days late If payment is due by the 10th of the month, the 11th day is 1 day late; on the 26th day payment is 15 days late. | If payment is overdue, late fees are due. Late fees depend on the deed of trust agreement and applicable law. |
| 16 to 30 days late | Lender may assess permitted late fees and send collection reminders. |
| 60 days late Example: payment due January 1st, 60 days late is March 11. | Borrower should get a late notice in writing to the address on record, notifying that a payment is 60 days late. |
| 61 to 120 days late | Additional collection and default notices may be sent, and additional late payment information is sent to the credit bureaus. |
| 120 days late | A 60-day notice of foreclosure will be provided. |
| 181 days late | If the proper notices have been made, an auction may be scheduled and the property can be sold at an auction. |
| After the auction | You have 10 days to vacate the property. A sheriff can enforce this deadline and escort you out of the house after day 10. |
My goal is to assist you to find the best solution. If we can meet and discuss your unique needs, I will give you the benefit of my experience and resources.
Foreclosure options
Selling the property
1. Sell the property in a traditional way.
- This can take three to six months to accomplish and is not certain.
- You may need money to do some repairs or cosmetic improvements to get top dollar.
- There are many issues to deal with, such as appraisals, inspections, showing the property, finding competent honest contractors, knowing what to do to fix up the house, and knowing what a good sales price is.
- It is possible to get a private loan for fix-up and living expenses, and for catching up on late payments. This option is case by case.
2. Sell for cash — non-traditional. Three to four weeks, no inspection contingencies, no lenders. This will be the lowest price of all the options and will be the least complicated.
Remain in the property — get a private loan
- Get cash to live.
- Pay the lender overdue money.
- Fix up the house and sell it.
Remain in the property with a reverse mortgage
- Must be age 62 or older.
- Must have equity.
- Can possibly get cash.
- Can possibly get monthly payments.
- Can stop making any future loan payments.
Bankruptcy is another route that affects foreclosure. See the Bankruptcy page.
Contact Shep Saltzman
For a confidential conversation about your situation and all of your options.
Shep Saltzman — Principal Broker, Ashbrooke Realty, LLC
11870 Sunrise Valley Drive, Suite 100
Reston, VA 20191
Call or text (703) 448-1313
realshep@gmail.com