“I’m behind in payments…will I be giving my house back to the bank in Minneapolis St Paul?”
Nobody wants to loose their house or be forced to giving their house back to the bank and loose all the equity they have built up in the house. But times can be difficult. Today the Corona Virus is forcing many good people out of work and making employers think about the lack of business that is coming into their company. This can cause people to get behind on payments without a good plan on how to get caught up. When people get behind their mind instantly goes to not wanting to give up their house so the bank takes it back.
If your situation progresses too far, you may be forced into the unfortunate situation of having to give your house back to the bank in Minneapolis St Paul Minnesota , leaving you temporarily without a place to stay or much hope in your future. In addition, there may be long-term consequences, including a dramatic and long-lasting impact to your credit (and your ability to get a house in the future).
No one wants that kind of problems and we are hoping that we shed some light on what your options are and timelines you need to be aware of. If you have any questions about giving your house back to the bank, and want to ask us, please call or fill out the form and we will help.
Here’s a brief overview of the foreclosure process
The Minnesota foreclosure process can vary depending on location and the type of mortgage you have.
Many people facing Foreclosure tend to wait too long and miss important deadlines. Or they simply don’t read the documents that the Bank or Financial institution sends out. We understand that this can be an extremely stressful time, however avoiding the process can cost you dearly.
Usually, if you miss a few mortgage payments, your loan company will start sending you notifications and then warnings. Over time, if you fail to pay back the mortgage payments you missed, the loan company may put your home up for public auction. This is called a county Sheriff sale.
At the Sheriff sale, the lender will be at the sale as well as some investors. This is help at the county court house and your house is auction off to the highest bidder. the lender will bid the amount that you owe on the mortgage. From this point on its called the redemption period and you have normally 6 months to bring the total amount to the lender plus fees and interest and then to get the house back. At the end of the redemption period, the house ownership goes from you to the lender or who ever bid the highest for your home at the sheriff sale. Trust me, those 6 months go by fast.
Fortunately, you have options!
If you wait until your home is foreclosed, it can have a devastating effect on your credit rating that will last up to 7 years. One option to protect yourself is to work out an arrangement with the loan company called a “deed in lieu of foreclosure”.
This is when you hand over ownership of the house to the loan company so that they save the money they would spend on foreclosure proceedings, which can be significant. And you get to avoid having a foreclosure listed on your credit rating.
You can also avoid foreclosure by selling your house before it’s lost at the auction. If your loan is paid in full then there will be no more penalties against you and your credit rating. (If your loan isn’t paid in full you will need to make up the shortfall).
Here’s an example to help you from giving your house back to the bank: Let’s say you owed $200,000 on your home and you sold your home to us for $190,000. You would give that money to the loan company, along with $10,000 to make up the short-fall, and your loan would be paid off. (If you contact a real estate attorney, you may be able to negotiate a deed in lieu of foreclosure deal in which the loan company agrees not to go after the difference in exchange for the deed to the house.
A second scenario is where you owe $190,000 on the house in Minneapolis St Paul metro area and it might be worth $225,000 but you are getting to the end of the redemption period where the back just takes it back. As an investor company Minnesota Cash Home Buyers might give you $5000 and we take over the note and pay all the closing cost. Some say, why not just try to sell it ourselves for $225,000 and we understand. The problem is timing. Trying to find a buyer traditionally who will pay all cash and close within a week or two are hard to find. If you try and fail on that front, you end up giving back you home to the bank and get nothing except bad credit for 7 years. The security knowing that you will walk away with some money in your pocket and credit is still in place we find is good enough for many people.
If you catch the foreclosure process early on and do all the things that your can do to save your house threw conversations with your lender, you are ahead of the game and may not have to think about giving my house back to the bank. Yet, many of us don’t want to deal with it and get caught in a situation that is not ideal, but you still have options. We just want to help you out of this situation with the least amount of drama and pain.
At Minnesota Cash Home Buyers, we’re professional real estate investors in Minneapolis St Paul metro area. Contact us today at (612) 444-5088 to find out what we can offer you for your house — even if it needs repairs.
I want to avoid giving my house back to the bank in Minneapolis St Paul!
Why do people choose to sell their home instead of going through foreclosure? (After all, they still don’t live in their home anymore.)
Well, losing a home can be difficult but the impact on your financial situation and your credit is considerably less than if you simply wait out the foreclosure process. In fact, going through foreclosure could impact your credit score by as much as 100 to 150 points. So the short-term challenge of selling your house is still a better choice than the long-term pain of giving your house back to the bank.