Temporary Halt To Foreclosures Gives Homeowners Time To Act

February 16, 2009 · Filed Under Loss Mitigation 

The news that three of the most known national banks have temporarily stopped foreclosing on defaulted home loans has made more than a few families breathe a small sigh of relief. Everyone seems to be counting on the Obama administration to reverse the current economic decline, and these large banks are no exception. Although this respite will only buy the homeowner facing foreclosure about one more month, it may be enough time to stop foreclosure altogether.

People behind on mortgage payments can take certain steps to stop foreclosure. If you fall into this category, and your house is on the market, here are some things to consider:

1) Make sure that your house is priced competitively. If you have equity in your home, and are facing foreclosure, you have the opportunity to adjust your selling price. The current market is a buyer’s market, and buyers know it. They are looking for the best value for their money. Too often homeowners are blinded by the price they paid for their home, which was purchased in a seller’s market at too high of a price. Be realistic about what you can expect to receive for your home.

2) Insist on holding numerous open houses. Now, understand that this is not for the purpose of finding a buyer. Most open houses do not result in the sale of the home. Your open houses are one of your most valuable tools because they provide feedback. You need to know why your home is not selling. Price, location, layout, or decor can all be factors.

3) Once you know how people feel about your home, change it. Resist the temptation to become angry or hurt, accept the advice as it is, and make changes. After you have painted, cleaned, fixed landscaping, or corrected the issues people have mentioned, hold another open house. Repeat, repeat, and repeat this process. Sometimes all it takes is a coat of fresh paint and moving some furniture around to change how your home is perceived.

4) Make sure your home is listed online, advertised heavily, and has color fliers complete with a lot of pictures. Everyone has to know your home is a great value for the money and why. Let everyone know you are willing to make changes for the buyer. A "seller comments" page is an excellent tool, and you can describe things you have updated or changed based on prospective buyer feedback. This lets your new buyers know that they can work with you.

5) Get together your mortgage payments as best you can. Look around your home and start selling. Ebay can be a great tool to make some fast cash. Accept the fact that you will have to take a loss on the things you sell, and decide which things you don’t really use or need. If you can put together a few mortgage payments, you may be able to negotiate your momentary respite into a longer one, and sell your home in the meantime.

6) Consider alternatives to a straight sale. Some investors will purchase your home for the price of the remainder of your loan, and rent it back to you. This lowers your payments so you may stay in the home. Try renting rooms out yourself, or the basement. This might give you the income you were lacking.

Pre-foreclosure sales tend to attract investors and first time homebuyers, both of whom like to see an interested homeowner who is actively seeking to sell or rent their home. Take the time the banks are offering to try to make the necessary changes that will make your home sell.

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