Once you have received the "Notice of Sale" or "Notice of Default" you will receive conflicting information about how you should proceed. Before you take any action please read the following list of Do's and Dont's pertaining to your property.

Things Not to Do:

Suggestion #1) Don't abandon the property. From the time you first receive notice of mortgage default from you lender, the foreclosure process can take up 6 months (and often times, even longer) before you will be physically removed from your home. It is imperative for you to maintain your home as your primary residence in order to delay the foreclosure process. Most banks and mortgage lenders will not even consider your application for assistance if you abandon the property.

Suggestion # 2) Don't ignore correspondence and other notices sent to you by your mortgage lender or the legal representatives (attorneys) of the lender. These notices often contain pertinent information such as response deadlines, court dates and places, etc. If you ignore these notices, or fail to respond to them, you may lose valuable rights to defend yourself in court.

Suggestion # 3) Don't make partial mortgage payments to your mortgage lender, unless you have received specific written approval from your lender to do so. Once you are in default (Over 60 Days Past Due on you loan) partial payments will be applied to interest/penalties only, or put into a special "suspense account". These partial payments will not reduce your principal balance. You should only make partial payments if you have made prior arrangements for a "mortgage loan work-out program", and make absolute certain that you have all of the details about these payment arrangements in writing.  

Suggestion # 4) Don't believe the promises of "Foreclosure Counselors" or "Loss Mitigation Specialists" that claim to be "looking-out for your best interest". Their job is to gather information from you that will expedite the foreclosure process for their employer. Always make sure that all promises made to you from these counselors/specialists are given to you in writing.

Suggestion # 5) Don't fall victim to the various consumer scams that promise to "settle your mortgage debt for pennies on the dollar", But, require that you pay an up front fee (often in the thousands of dollars) to "represent you" in negotiating with the lender. These scams often prove useless, and can even result in you losing your home faster than the standard foreclosure process. Legitimate REALTORS who know the foreclosure process are compensated by a sales commission, paid only at closing, from the proceeds of sale, and paid from the lender. There should never be an "up-front fee" (charged to you) to conduct a "Loan Work-Out" or "Pre-Foreclosure Short-Sale".

Suggestion # 6) Don't attempt to qualify for a "Mortgage Loan Workout Program" if you no longer wish to live in your home. Or, if your home is going to cause additional/increasing financial burdens for you in the years to come.

Suggestion # 7) Don't attempt to sell your home "For Sale by Owner" (FSBO) in the belief that you can get more money from the sale of your home by avoiding the payment of a real estate commission.  Most mortgage lenders will require that you provide proof that your home be listed in the local Multiple Listing Service (MLS) of your local Board of REALTORS in order to consider it for a "Pre-Foreclosure Short-Sale". The Mortgage lender will pay for the Realtors commission if it is sold as a Short Sale.

Suggestion # 8) Don't become "greedy" when you do attempt to sell your home under a "Pre-Foreclosure Short-Sale".  Very few sellers ever receive any money at closing when conducting a "short-sale" (after all back fees and expenses are deducted). Your main objective is to sell the home at the highest price that the market will allow. A competent REALTOR will provide you with comparable "Sold/Listed" properties in your neighborhood, and will help you to determine your home's "fair-market value range". This is the price range in which your home should sell under normal market conditions. It is the most money you will receive for the home.

Suggestion # 9) Don't accept  the "Low-Ball" Offers to that you receive on your home, "just to get the sale over with".  Only accept an offer that can be justified from using recent "Sold/Listed" Comparable properties. Your mortgage lender (and any other lien holders on the property) will always have the final say as to whether or not they will accept the "short-sale" offer- and they will always require that an appraisal be done on the home to justify the price offered. If the offer meets their expectations, they will accept it as written.

Suggestion # 10) DON'T panic!!! This is the most important point of all!!  As mentioned, the foreclosure process can take up to 6 months, and even longer in many cases. If you remain calm, and take the necessary steps as early in the process as possible, you and your mortgage lender may very well find an acceptable common solution to your mortgage delinquency/foreclosure problem.

Things to Do:

Suggestion #11) DO hire/retain competent legal counsel! The foreclosure process is a very complicated and difficult one. It is imperative that you retain the help of a real-estate attorney who is familiar with foreclosures, and the methods of delaying them. You should consult with an attorney as soon as you receive the first notice of delinquency from your mortgage lender.

Suggestion #12) DO seek the help and advice of a competent REALTOR who is familiar with "Mortgage Loan Work-Out Program" alternatives and the "Pre-Foreclosure Short-Sale" process. They will be more than happy to assist you by providing you with the information/advice necessary to make the right decision for your particular situation.

Suggestion #13) DO take advantage of federally-funded homeowner assistance programs provided through H.U.D. (U.S. Dept of Housing and Urban Development) that can explain your alternatives to foreclosure, and direct you to programs designed to help the financially troubled homeowner avoid foreclosure.

Suggestion #14) DO contact your mortgage lender immediately when you first face economic difficulties that prevent you from making your monthly mortgage payments. During periods of short-term unemployment or other financial difficulty, most lenders will be willing to work with you---As long as you can get back on track within a period of one year or less.

Suggestion #15) DO maintain complete and accurate records of all correspondence (mail, phone calls, legal notices, etc) received from your mortgage lender in regards to your loan delinquency and the foreclosure proceedings being conducted against you. It is important that these records are maintained so that your attorney can provide you with a legal defense against the foreclosure process, and delay the sale of your property as long as possible.

Suggestion #16) DO apply for any "Mortgage Loan Work-Out Programs" (if available, and they are right for you) from your lender. These programs are designed to prevent mortgage foreclosures by giving homeowners facing short-term economic difficulties a period of time (up to one year) to make reduced payments on their property, sometimes at a reduced interest rate.

Suggestion # 17) DO consider conducting a "Pre-Foreclosure, Short Sale" on your property. A "Short-Sale" is any sale in which the Net Proceeds of Sale (Sales Price minus Expenses of Sale, Back Property Taxes and Legal/Other Fees) is less than the amount you owe to satisfy your mortgage. Most lenders are willing to (and some are even required to) give you the opportunity to sell your home at "Fair Market Value" for a period of up to six months.

Suggestion #18) DO continue to complete routine maintenance and minor repairs to your home. In the event that pursuing a "Pre-Foreclosure Short-Sale" becomes the best alternative for your particular situation, it will still be imperative for your house to sell for the highest possible dollar in the shortest amount of time. Make sure your home is attractive to the potential buyer. The better your home shows, the higher the sales price you will receive.

Suggestion # 19) DO maintain Casualty/Fire/Theft Homeowners Insurance on your property. If you are responsible for paying your own homeowners insurance (outside of escrow) and you allow the policy to lapse (expire) you may be held financially responsible for any fire, theft or other damage that occurs to the property- Contact your insurance agent or Attorney for more information and further advice.

Suggestion #20) DO continue to pay your city/county property taxes (if possible, and you are not already behind on them). If you are responsible for paying your own property taxes (outside of escrow) and you fail to do so, your taxes may be sold at the County "tax-sale". Many States have laws allow the purchasers of your property taxes to charge you up to 2% interest per month (An annual percentage rate of 24%). All back property taxes must be paid at closing.

Suggestion #21) DO contact Michele Vaughn AS SOON AS POSSIBLE. The sooner the better she will be able to help you. Contact Michele today to schedule a discrete and confidential appointment. We’ll explain how we can help you, and determine if your situation could qualify for Loan Modification or the Short-Sale process.

Michele Vaughn, REALTOR,  "The South Orange County Pre-Foreclosure Specialist"

 Do Not Lose Your Home to Foreclosure! Call me for the help you need

(949) 295-7171 Direct line