{"id":36953,"date":"2013-02-01T10:00:33","date_gmt":"2013-02-01T17:00:33","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=36953"},"modified":"2024-02-13T16:51:56","modified_gmt":"2024-02-13T23:51:56","slug":"2013-02-01-how-to-delay-stop-foreclosure","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/2013-02-01-how-to-delay-stop-foreclosure","title":{"rendered":"How To Delay or Stop Foreclosure"},"content":{"rendered":"

I’ve worked with a ton of short sales<\/a> over the past year. \u00a0The single biggest source of stress for a short sale listing agent is watching the foreclosure date approach as you try to close the deal.\u00a0\u00a0That date looms on the calendar, circled in red, with the clock moving faster and faster towards it.\u00a0 I’ve had deals where on the day before foreclosure I was sitting on the phone, biting my nails, trying to push a postponement through. \u00a0Mostly, I’ve been successful.\u00a0 Although you hear people complain that “banks must want to foreclose,” and though I admit their processes sure make you feel like that, they really don’t want to foreclose.\u00a0 Frankly, they will lose more money by foreclosing (in most cases) then trying to work out a sale with a potential buyer at a “short” payoff.<\/p>\n

I am in Texas and we have some of the swiftest foreclosure proceedings out there.\u00a0 From the time the homeowner misses a payment and is served a notice of default, a foreclosure<\/a> can be completed in as little as 30 days.\u00a0 Not all foreclosures end up on the courthouse steps here in Texas.\u00a0 Many times the bank will just hold on to the property and list with a Realtor.\u00a0 They’ve discovered they can get more for the property that way.<\/p>\n

There are methods to postpone the foreclosure date!<\/strong><\/p>\n

As an investor that works with motivated sellers, you will eventually meet someone with equity in their home that is just weeks or even days away from being foreclosed. \u00a0If you do not have the time to close the deal before the foreclosure date, then here’s what you do:<\/p>\n

Stop a Foreclosure: Properties That Have Equity:<\/h2>\n
    \n
  1. Get a 3rd party authorization:<\/strong>
    \nMany of the big box lenders(Chase, Bank of America, and Wells Fargo) have their own that you MUST use. \u00a0You can not use a generic form for these lenders.\u00a0 You can find these forms on their respective website.\u00a0 Have the seller sign it and fax directly to the loss mitigation department of the lender (along with the sales contract & proof of funds, see below).\u00a0 Follow up with a phone call in 24 hours.<\/li>\n
  2. Get purchase contract signed, executed, and receipted:<\/strong>
    \nThe contract\u00a0must be executed and is a good idea to have your earnest money to the title company so you can have a receipted contract to send.\u00a0 Additionally, the title company can begin their work so that closing can\u00a0take place.\u00a0Fax the executed contract along with your 3rd party authorization including\u00a0PROOF OF FUNDS<\/strong>. \u00a0Be sure the loan number is on the top of every piece of paper you send in.\u00a0 By sending in these documents, you are showing the lender you are capable and ready to close the deal.<\/li>\n
  3. Follow up, follow up, follow up:<\/strong>
    \nAllow 24 hours for your docs to get in the system and then start hounding them.\u00a0 When you call, instruct customer service that this is not a short sale.\u00a0 Depending on what lender it is they may transfer you to another department.\u00a0 You will need to also request the payoff immediately as well.\u00a0 With a property with equity, there should not be too much of an issue pushing the sale through.<\/li>\n<\/ol>\n

    Stop a Foreclosure: Properties With Negative Equity:<\/h2>\n
      \n
    1. \n
        \n
      1. Documentation:\u00a0<\/strong>
        \nIn a situation where it will be a short sale, I would recommend using an agent who is short-sale proficient.\u00a0 For one thing most of the big box lenders now require the homeowner to use a licensed real estate agent to sell their property.\u00a0 However, you can try to go it alone.\u00a0 In addition to the 3rd party authorization, the homeowner will also need to submit a completed package which also includes their financial information and hardship letter.\u00a0 Again, most of the big lenders have their own package that they use. \u00a0Fax the 3rd party authorization in immediately, so that you can let them know the homeowner is requesting a short sale.\u00a0 Depending on the lender and the loan type, this will many times postpone the foreclosure.<\/strong><\/li>\n
      2. Property value:\u00a0<\/strong> Get a realistic evaluation of what the property is worth to submit your offer.\u00a0 The bank will require a 3rd party valuation of the property.\u00a0 Valuations typically come in right at market rate.\u00a0 If the property needs repairs, include a detailed list with your offer, including pictures.\u00a0 It will help justify a lower offer.\u00a0 Submit your signed, executed, receipted contract with the homeowners financials.\u00a0 Make sure the loan number is on the top of every document.<\/li>\n
      3. Follow up:<\/strong>\u00a0 As before this is very important.\u00a0 I typically call lenders daily to inquire on an update.\u00a0 Remember, depending on the state you live in, the lender, and what type of loan it is, response time may vary between two weeks to nine months.<\/li>\n<\/ol>\n<\/li>\n<\/ol>\n

        Stopping a foreclosure in its tracks is possible.\u00a0 It just takes some diligence and patience.<\/p>\n

        Good luck and happy investing!
        \nPhoto: meghannash<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

        I’ve worked with a ton of short sales over the past year. \u00a0The single biggest source of stress for a short sale listing agent is watching the foreclosure date approach […]<\/p>\n","protected":false},"author":784,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[8],"tags":[1198,1121,3637,3441,3506],"class_list":["post-36953","post","type-post","status-publish","format-standard","hentry","category-real-estate-trends","tag-avoid-foreclosure","tag-foreclosure-rescue","tag-negative-equity","tag-short-sale-negotiation","tag-short-sale-process"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/36953","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/784"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=36953"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/36953\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=36953"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=36953"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=36953"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}