Answers to your Foreclosure Questions
Disclaimer: The following information is NOT intended as legal advice. Consult with professionals for legal advice and tax implications. No recommendation of service is intended. Information is specific for residents of Ohio.
Please keep in mind that the only thing that will STOP foreclosure is the REPAYMENT or SETTLEMENT of your debt. Everything else is just a delay of the proceedings, including filing for bankruptcy.
Frequently Asked Questions
Q: Should I try to KEEP MY HOME or would it be better for me to SELL MY HOME?
A: If your monthly house payment (including property taxes and insurance) does not exceed 40% of your gross monthly income, you should be able to afford keeping your property. If your monthly house payment is greater than 40% of your gross monthly income, consider selling the property to avoid negative impacts on your credit.
Q: Which options do I have available if I want to KEEP MY HOME?
A: You have three options available to you:
1.
Loan Modification
Loan Modification2.Repayment Plan
Repayment Plan3.Forbearance
ForbearanceA loan modification workout program makes sense if you had a decline in income and can no longer afford the original loan, but you could afford the payments with a little adjustment. You may contact your lender(s) and ask if they can lower your interest rate, extend your loan period or add the delinquent portion along with the fees to the “back-end” of your loan so you can repay these over time.
A repayment plan may be a solution for you, if you had a short-term financial hardship, but are now getting back on your feet. Once foreclosure has been initiated, most lenders will not accept any more payments unless the entire delinquent amount has been paid.
A forbearance agreement means that your lender will forbear (stop) from proceeding with the foreclosure for a short period of time. Usually, this is done along with another workout agreement.
Q: What are my options if I have decided to SELL MY HOME?
A: You have these two options available to you:
1.Short Sale
Short Sale2.Deed In Lieu
Deed In LieuA "short sale" or "short payoff" is your best solution if you owe more than your home is worth, or if you simply can't afford your payments any longer. When negotiating a short sale, we will ask your lender(s) to discount the mortgage principal so we can purchase or offer your home for sale at or slightly below market value. We can negotiate a short sale even if you have more than one mortgage, or other liens (HOA, Condo Association etc.) against the property.
As a last resort, if you have only one mortgage and no liens against your property, you can deed your home back to the bank in exchange for forgiveness of your mortgage. This is called a deed in lieu. Lenders usually prefer a short sale over a deed in lieu, because they receive cash immediately, and are not stuck with a property on their balance sheet.
Q: When does foreclosure begin?
A: Once you are 90 days behind on your mortgage payments, your lender will initiate foreclosure proceedings. Your lender will notify you in writing that you are in default. If you don’t attempt to resolve this situation (see your options above), your lender will try to get a judgement against you and sell your property at public auction.
Q: What happens when my home gets sold at auction?
A: You have a 60-day redemption period during which you can pay the delinquent amount plus any late and legal fees. If you don’t do this, you will be evicted.
Q: I was divorced, and my spouse got the house. How can I get my name off the mortgage?
A: You can’t. If you borrow money to purchase or refinance your home secured by a lien against the property, the lien remains when you transfer your half of the property to your spouse. The promissory note you signed for the debt still remains your obligation. If your spouse is in default, you should try to get a deed back and use one of the five workout options shown above.
Q: How long does certain information stay on my credit report?
A: In theory - forever. However, federal law requires that any negative remarks be removed upon request after 7 years or after 10 years if you declared bankruptcy. If you don’t ask, it won’t go away.
Q: How do I get information removed from my credit report?
A: Some of the information on your credit report may just be plain wrong. Accounts may not be yours; judgments against people with similar names and duplicate items are very common. Ask the credit bureau in writing to re-investigate the information. Under federal law, the credit bureau MUST re-investigate and get back to you within 30 days. If they don’t, the item in dispute has to be removed.
Q: What affects my credit in a positive way?
A: Installment loans paid on time, a few open credit lines with low balances, living at the same address for several years and owning a home tend to improve your credit score.
Q: What affects my credit in a negative way?
A: Too many revolving credit card accounts, too many credit inquiries, high balances on credit cards, late payments, judgments and bankruptcy lower your credit score.
Q: Can I get a loan with bad credit?
A: This depends on the type of loan. Unsecured loans, such as credit cards and bank loans, usually require a good credit history. Secured loans, such as home mortgages and car loans, are more flexible. Lenders tend to be more aggressive with secured loans and are willing to take larger risks when you have collateral to secure the loan.
Q: Should I cancel all my credit cards?
A: NO! A person without credit may be worse off than a person with bad credit. You may not be able to get phone service, utilities or a job with a poor credit score. However, a person with an “empty” credit file looks very suspicious. Have a credit card or two, and use them once in a while.
Q: Can I avoid foreclosure by declaring bankruptcy?
A: Unfortunately, you can't. Chapter 7 bankruptcy will eliminate most of your debts. .(For details, please visit Law for All). However, as soon as your Chapter 7 bankruptcy is discharged, your foreclosure will continue where it left off. While you are not personally liable for the remaining balance of your mortgage, you are still liable for any code violations or accidents happening on your property! A Chapter 13 bankruptcy only makes sense if you have a source of regular income. If you miss a payment during your court mandated repayment period, your foreclosure continues where it left off. Remember, a bankruptcy stays on your credit report for 10 years and should only be considered if all other options fail or if you have other debt (such as medical bills).
Q: What can your company do for me?
A: If you have determined that selling your house is the best option for you, then we can offer to buy your house and settle your debt with your lender. We can accomplish this via a "short sale" or "short payoff" of your mortgage. Please keep in mind that, unless you have an FHA loan, your lender is not obligated to offer you any workout options. In our experience, most lenders will be open to look at fair purchase offers. Sometimes the lender requests that the whole short sale process is handled by a licensed agent and the property marketed on the MLS. Since Susanne is a Realtor with Solutions for Real Estate, she can take care of this easily at no cost to you.
Q: How much do your services cost?
A: There are NO fees or commissions that you will have to pay if our company purchases your property. We take care of all closing costs, any back taxes, junior lien payoffs and even your outstanding water bill. If your lender wants the property listed on the MLS, then the buyer will pay for the realtor's commissions.
Q: What happens to the balance of my mortgage, once you purchase my home?
A: We start negotiations with your lender asking them for a full release, which means that we are seeking a settlement of your debt. Our purchase price is “payment in full” and all your remaining debt is forgiven. Some lenders, however, will only release their lien and not forgive the remaining debt.
Q: How long will it take for you to negotiate a short sale?
A: This largely depends on your lender. We have completed short sales in as little as 4 weeks and as long as 6 months.
Q: When do I need to move?
A: Once we have a purchase price negotiated with your lender, you have approximately 20 days to move. You need to vacate the property before closing.
Q: Who is eligible for a short sale?
A: There are certain requirements that must be met before attempting a short sale.
- Your payments must be delinquent for at least 30 days.
- You have a severe financial hardship, like job loss, divorce, prolonged illness, tenants not paying, etc.
- You cannot afford to keep your property any longer.
Q: What is the procedure of a short sale?
A: As soon as you have determined that a short sale is the best option for you, contact us as quickly as possible. We meet with you at your property, take a quick walk-through and answer any questions you still have. We need your written permission to contact your lender(s) and discuss your mortgage. Since we are asking the bank to take a loss when we purchase your property, they will require proof of your financial hardship.
SELL YOUR HOUSE, SAVE YOUR CREDIT!
Questions
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Testimonials
"Dear Kurt & Susanne:
Thanks for helping me stop the foreclosure on my rental properties. I purchased 7 rental houses a couple of years ago. Unfortunately, they were not in very good condition when I bought them, and I had to spend a lot of extra money to rehab the houses to get them ready for tenants. Some of them never got rented, and I was unable to generate a positive cash flow with these properties. Therefore, I fell behind on my mortgage payments.
Thanks to you and your wife, most of the properties are now sold and my obligations to the banks have been wiped out. Finally, I don’t have to worry about keeping the houses rented and getting enough money to cover my monthly payments. This is a great relief.
I am really glad you got me out of this nightmare! Without you, I would have multiple foreclosures on my credit. Thanks for giving me a chance to start fresh. "
Art D., Galloway, Ohio
“Kurt agreed to negotiate with my mortgage company to purchase my property on what is called a Short-Sale. Kurt has kept me well informed through-out this process, and has responded promptly whenever I called him with questions or concerns. He has helped me out of my Foreclosure by negotiating a Short-Sale with my mortgage company, and has helped me find an apartment, too. He has been flexible in allowing me plenty of time to move and clean out my house.
In short, Kurt has been open and honest during this entire transaction. He kept me well informed, followed through and did every-thing he said he was going to do in a prompt and efficient manner.”
Mark B., Columbus
Hilltop
“Mr. Kurt Novak has been very helpful. He was able to buy my house and save it from being foreclosed on. Now the bank is satisfied, and I received a full release of my mortgage. I am very happy with Mr. Novak's services.
I highly recommend him to anyone, and I want to thank Kurt for his help.”
James V., Columbus
Old Town East
“Kurt,
Thanks for helping me sell my house, for stopping the foreclosure and saving my credit. I am really glad you stopped the sale of the house at the Sheriff's Auction.
Thanks a lot!”
Foster D., Columbus,
Riverbend
Testimonials
"Susanne was wonderful from the very beginning with the house. I have never been in this position before, so I didn’t understand the process or how anything worked. She was very patient and explained everything in great detail. She kept me very well informed of everything that was going on the entire time.
Kurt was always very nice and courteous when he needed to come to my home or set up a meeting. Susanne and Kurt helped me get out of an ugly situation, and helped me save my credit at the same time. Thanks to them I can start fresh and begin living life again.
Thank you very much Susanne and Kurt! You truly are helping people in tough situations!
Mary J., Grove City, OH
"I am a resident in Galloway Ridge who has been struggling every month to pay my mortgage ever since my co-borrower moved out.
My house has been listed for sale for eighteen months with only two showings.
For me foreclosure seemed inevitable until I got Parkland’s letter in the mail. Usually I would discard such a letter for junk mail because it sounded too good to be true. I gave Kurt and Susanne Novak a call, which was the best move I have ever made, because they wanted to buy my house, save me from foreclosure and from ruining my credit.
In no time at all they purchased my home and helped me through the whole process.
I am very gratefull to the Novaks for helping me through this tough time of my life. They are good people who care and stuck to their word. Without them my life might have took a turn to the worse. I am now back on track and stress free, and I owe it all to the good people at Parkland Group."
Sachin I., Galloway, OH
