How can I avoid foreclosure?
Many families are facing the grim reality of an impending foreclosure these days. Many ask, what are my options to avoid foreclosure in Wisconsin? The single most important thing is to take some action. Many families just assume that they just have to sit and wait for the sherriff to come and throw them out, then find a place to rent. There are better options.
If your home is foreclosed on, the bank will try to sell it at auction. Assuming it sells, it will sometimes sell at up to 40-50% off market value in Milwaukee. If this amount does not cover the mortgage, the bank can file a deficiency judgement against you and still come after you for the amount of their loss. This is in addition to the hit to your credit.
Is is always better to take action. Here are some options:
1. Refinance with the bank. Assuming you still have good income and credit, this is the best option for both you and the bank. It is always a good idea to connect with the loss mitigation department in the bank as well.
2. Sell the home through retail channels. While this can take a long time and require you to fix up the property to satisfy the buyer, this option may bring a higher price than a cash sale if you can wait. The down side is that you have closing costs, owner concessions and commissions that quickly eat away at profit. You also continue making mortgage payments each month while you show your house and wait for the eventual buyer to get financing.
3. File for a bankruptcy restructuring. While any bankruptcy hurts your credit, consult an attorney to see if this step could stop the foreclosure auction if you want to remain in the property and your financial situation has improved.
4. Rent the property out. Rental income may cover the mortgage payment. The key is to get the right tenant who will take care of the home and service your mortgage while you both build your credit.
5. Find someone who will catch up your payments. Work out a mutually beneficial agreement with them where the mortgage stays in place and they make the payments.
6. Sell the home quickly to an investor. Get some cash and move on with your life. This method can work if you have equity in the home.
There are more complex strategies as well that can successfully avoid foreclosure in Milwaukee and many can be profitable to both you and the investor depending on the details of your particular property, loan and next steps. The key again is to take some action and connect with someone.