How to avoid foreclosure: The do’s and don’ts of the foreclosure process

When you’re facing foreclosure, it can feel like you’re out of options. In reality, you just need to take smart actions from the moment you miss your first mortgage payment to the time you receive a Notice of Sale in order to avoid foreclosure or bankruptcy.

You have options at every step of the way, so don’t fret. Here is your guide to the foreclosure process (and how to get out of it):

1. So you’re missing payments. Three, to be exact.

Nothing good happens when you miss even one mortgage payment. You’ll usually get a grace period of about 15 days during which nothing will happen, though you can be sure that your lender knows you missed your payment. After two missed payments, you can be pretty sure you’ll hear from your lender. After three missed payments, the foreclosure process will begin. It’s best if you can get back on track before the third missed payment.

DO: Be up front with your lender. If it’s a short-term problem, you have options such as forbearance that will help you in the interim. You might fall under this category if you are experiencing short-term medical problems, unemployment or a recent divorce. If, however, you simply took out a mortgage you can’t afford, you may need to sell your home. Either way, being upfront and honest with your lender can save you from the formal foreclosure process and save your credit.

DON’T … ignore calls from your bank or lender. You have options, but there will be fewer and fewer options (and your bank will be less willing to help you) the longer you wait before asking for help.

YOUR OPTIONS: You need to be honest with yourself—is this a short-term situation—like a medical situation or unemployment—or a long-term problem where you cannot afford your mortgage? If it’s a short-term problem, you can call your lender and ask for forbearance, or an agreement between you and your lender to delay the foreclosure. Payments might be lessened or postponed for a short period of time with the understanding that you will make up for it at a later date. If it’s a long-term problem, selling your home might be your best option, but you’ll need to sell it quickly.

2. The limbo between Notice of Default and Notice of Sale.

Most Missouri foreclosures are non-judicial, so once the foreclosure process formally begins, you will likely get a series of two formal notices posted on your front door. The Notice of Default is typically sent to you about 30 days after your first missed payment. Once you receive this notice, you need to act quickly, because once you see the Notice of Sale, you have about 20 days before your home goes to auction.

DO … Answer your lender’s calls. Or, better yet, call them yourself. It won’t be a fun conversation, but you will lose your home and your credit will be ruined if you do nothing.

DON’T … Over—or under—react. Your foreclosure is on record with the County Recorder’s Office and likely has been published in your local newspaper, which means that you will get calls from ”mortgage scammers.” Their pitch is this: ”We will make your mortage payments for now, and you will pay a lower ’rent’ in the meantime to live here. Once you get back on your feet, you have the option to buy your home back.” It can sound like the perfect solution. But, like most things that sound too good to be true, it isn’t. Most companies like this have no intention of actually selling your home back. The contract you sign will be impossibly confusing. You sign the lease anyway because you’re scared of losing your home. The ’low rent payment’ is higher than you thought and you default again. You are evicted. They then sell your house. DON’T sign one of these leases unless you personally know the company is reputable. You could just be digging yourself into an even deeper hole.

YOUR OPTIONS: At this point, you have two options. You can reinstate your mortgage or sell your home. To reinstate your mortgage, you will need to make up your missed payments and remain on track. Again, if you cannot afford your home, you need to come to terms with the fact that you will likely lose your home. You can, however, still save your credit. Shift your focus to that. If you haven’t called your lender, it’s better late than never. If at all possible, they’d also like to avoid the expenses of foreclosure. To this end, selling your home wholesale might be the best option.

You need to act quickly either way, but if you’ve already received your notice of sale, you have no time to waste. This is the last time period where you still have some control and a few options. Pick up the phone now!

3. Your home goes to auction.

Once your home goes to auction, you are effectively out of options. Even if your home isn’t sold, the property is officially repossessed by the lender. If you haven’t already been evicted, you will be soon. It is vital to sell your home or make an arrangement with your lender before this point.

At Wren Realty, we’ve been helping St. Louis area homeowners avoid foreclosure for 30 years. We buy houses in any condition, even those being foreclosed on. If you lose your property to foreclosure, not only will you lose your home, but your credit score will be shattered as well. We’ll work with you to make selling your home stress-free while keeping your credit score intact. We like to think of ourselves as people first, house flippers second—we’ll treat you like our neighbors. We’re hope when you need it most

If you’re up against foreclosure, give us a call.

Contact Wren Realty, Inc.


Please contact Rob or Laurie, by phone or through our online form, with any questions you have about selling your property.

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