Simply put an auction can happen to any homeowner.
It usually starts with the homeowner failing to make mortgage payments and/or property taxes. The mortgage lender, a bank or a servicing company, gives the homeowner usually 90 days to make payments and to restore the property. If nothing occurs within that time frame, the lender has the option to either put the property under foreclosure or put it up for auction. Once the lender has repossessed the home, they’ll try to sell it quickly to recover their investment.
There are several options to avoid foreclosure and therefore save your home from auction:
- Contact your lender– Contact your lender to explore foreclosure prevention options. If there’s any difficulty in communicating with your lender, you can visit Avoiding Foreclosure|HUD.gov.
- Apply for a Loan Modification – this can help delay foreclosure. If approved, the foreclosure will be permanently stopped as long as you are up-to-date with your payments. Please visit Loan Modification for additional information.
- Refinance – this option is only available before pre-foreclosure proceedings begin. if your lender refuses to refinance your loan because you’re considered a high-risk borrower, you can contact a private lender to Refinance with a Hard Money Loan* to stop foreclosure. The downside is that private lenders offer higher interest rates and fees, but this also allows you to buy time to avoid foreclosure.
- Short Sale – For homeowners who owe more than what the home is worth, a short sale is sometimes the best option. It allows the homeowner to ask the lender’s approval to sell their home for less than the delinquent amount. The lender receives the proceeds and forgives the remaining amount with deficiency judgment*. Please visit Short Sales for additional information.
- Short Pay – This occurs when the market value of a property is not enough to cover the mortgage secured against the same property. If accepted, the lender will agree to a payment that is significantly lower than the total amount owed by the borrower.
You can visit Making Home Affordable as they offer an MHA Program, which helps homeowners avoid foreclosure by lowering monthly mortgage payments and get lower rate loans. If you are already under foreclosure, the program offers a way to avoid foreclosure. It also helps homeowners that are stuck paying more than what their homes are worth.
https://www.hud.gov/FHA or Federal Housing Administration, which is part of U.S. Department of Housing and Urban Development (HUD) assists homeowners to halt and reverse foreclosures. It offers various programs and resources to help FHA-insured homeowners that are facing financial hardship or unemployment.
How long does a foreclosure auction take?
- Foreclosure cases can last for years while the auctioning process could last for months.
What happens when a foreclosed house goes to auction?
- The court orders a public auction for the foreclosed home if the lender wins the foreclosure lawsuit.
- The lender publicly auctions the home to recover costs from the investment.
- The highest bidder wins the auction and receives the title.
How soon after foreclosure is eviction?
- The auctioning process could take months before the sale is made. The foreclosure sale date must pass before the eviction process begins.
Can you save your house from auction?
- You have several options that can help you save your home from auction!
- Contact us for a free consultation, and together, we can decide what option is best for your home.
*=DEFINITIONS OF TERMS USED:
Hard money loan: Is a short-term, non-conforming loan that comes from individuals or private companies that accept property or an asset as collateral.
Deficiency Judgment: A deficiency judgment is a ruling made by a court against a debtor on a secured loan (ex. Mortgage secured by a property). The deficiency judgment is filed when the sale of the property by the lender does not recover the debt in full.