How to Avoid a Foreclosure in Southwest Florida

There are a number of reasons a person may be at risk of their lender foreclosing on their mortgage loan, and they all involve some form of financial issue – the borrower has not kept up to date on the payments.

Any type of severe financial hardship can mean a late or missed mortgage payment, like an emergency car repair or urgent medical care. Many people are a few days late on their payments, but that won’t lead to a foreclosure.

But when one missed payment turns into two or more, that’s when the lender will take action to get their money back by foreclosing on the property.

Here are a few things you should consider if you find yourself behind on your mortgage payments.

Take the Proactive Approach – Its never a good idea to just stick your head in the sand and ignore the problem, hoping it will work itself out. You should call your mortgage lender to discuss the situation as soon as possible.

You may be able to get the delinquent amount re-financed into your existing loan with a loan modification, or agree to adding an amount to your current payments until the delinquent amount is paid off.

A loan modification can re-amortize the terms of repayment, the interest rate and other factors. You may also be granted a special forbearance, forgiving or refinancing the delinquent amount if the bank agrees it was caused by some type of extreme financial hardship and loss of income which has since been rectified.

Of course, a key part in attempting to avoid a mortgage foreclosure is knowing your legal rights under Florida law. Before you begin negotiations with your lender you need to be aware of what you and the lender are allowed and not allowed to do legally.

You should become familiar with all of the terminology and legalese that comes with an attempted foreclosure proceeding so you can better understand the process. Lenders are governed by Federal law and must provide satisfactory effort in reviewing options on how you can avoid a bankruptcy filing against you.

There are independent counselors through FHA and The State of Florida Attorney General’s Office, and others like the Florida Senior Helpline for people over aged 60, and service members can look for help through the Veteran’s Affairs Administration.

Be watchful for entities or individuals who may offer to get you out of foreclosure, even if there is “no charge or fees.” This often leads to the homeowner signing over all of their legal rights to their home which can lead to a lender or any liens not being repaid, and other serious factors.

There are a lot of scammers out there who prey on the elderly and those that have fallen behind on their mortgage. Be sure to not let your financial desperation get you in worse trouble. The Consumer Financial Protection Bureau also provides useful information on avoiding foreclosure scams.

Beware of companies that appear legitimate offering to make your bankruptcy go away for a payment in advance, and look very closely at any email or postal mail you receive from your lender, as it may not be legitimate.

Always make sure to take notes – better yet, communicate by email so you have a record of the correspondence – after any contact with your lender regarding your foreclosure case.

Other options include voluntarily turn-over of the deed to your property to the lender prior to them filing a foreclosure notice against you.

This can be a tricky option, called a deed in lieu of foreclosure, because you’ll need to find out if the lender will agree to forgive any shortfall between a possible sales price and the amount of the loan balance owed.

A short sale is another possibility, when a lender agrees to let you sell the home, takes 100% of the proceeds and forgives any remaining balance.

Find an All-Cash Buyer

An all cash sale can mean a much faster overall transaction, allowing you to avoid foreclosure proceedings quickly. There are a number of companies and investors in Southwest Florida who will offer a fair cash offer on your home, and you won’t need to wait for any lengthy home inspections or mortgage loan approvals for the buyer.

Marketing your property correctly if you’re looking for an all cash sale is key to your success, along with a realistic sales price goal. Your main goal should be to get out from under the loan commitment as soon as possible to avoid snowballing into more severe financial issues.

Learn more about the benefits of finding an all cash buyer for your home.

Foreclosures on the Rise

According to Florida Trend, foreclosure rates from October 2020 to October, 2021 rose an astounding 71.26%. Florida ranked second behind only California for the rate of foreclosures, with nearly 10,000 filed per quarter.

Foreclosure can lead to serious difficulty in your future, including getting a car loan, being approved for a rental home and much more. Doing all you can to confront and fix the situation sooner rather than later is the key to a better overall outcome.