Interview with Dallas Real Estate Expert Dan Shoemaker Explains the Truth about Selling a House Subject To as a Means to Prevent Foreclosure • What is a Subject To? Subject To is a short way of saying you're selling…
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Foreclosure is one of the toughest experiences anyone can face. It’s important to know what options are available to stop your Dallas foreclosure. Do not just give up or just walk away from your home! It may be possible to keep your house or at least walk away with your credit intact. If you’ve already tried some of the methods listed below with no resolution, contact us today at 214-444-9385.
1) If you’re only a month or two late, make the mortgage payment as soon as possible. Include all late fees. Document your payment and bank statement showing the funds were deducted from your account.
2) Special Forbearance: Sometimes, short-term financial problems arise due to special circumstances such as a medical emergency or job loss. If your mortgage company believes you have a valid temporary reason for the missed payments, it may grant you a special mortgage forbearance in order to stop your foreclosure in Dallas.
3) Short Refinance- Your mortgage lender may agree to forgive some part of your debt and refinance the remaining debt into a new loan.
Loan Modification-A loan modification allows you to refinance your mortgage or extend the term of the loan. Your lender may settle for monthly mortgage payments that are within your budget. Loan Modifications can take several months to be approved or denied. During this time frame, you will not make any mortgage payments. However, if you are denied a mortgage modification, you may be required to catch up on all of your payments and late fees in full or face a “fast forward” foreclosure. Many homeowners incorrectly believe that they have been approved for a Loan Modification when it is still in process and neglect to make contingency plans.
4) Reinstatement- Your lender may allow you to pay the reinstatement amount which will include all of the missed payments, penalties, interest and attorney fees.
5) Sell your home on the MLS- If you have enough equity in your home, you may be able to list your home on the MLS and sell to a retail buyer. Be prepared to have 7% of the sales price taken off the top for agent and title fees. Additionally, you may be required to make necessary repairs and wait 30+ days to close.
6) Sell your home to a real estate investor- If you’re unable to make any mortgage payments, you may be able to stop foreclosure by selling your house to a real estate investor who might be able to buy your house with cash if there’s enough equity. An investor will need to buy your home at a discount but typically, there are no additional fees taken at closing, you won’t need to make any repairs and you can close as quickly as needed.
7) Short Sale- If you are convinced you can not catch up on your past due payments and you owe more than your home’s current value, you may be allowed to sell your house for less than you owe or conduct a Short Sale. Contact us at 214-444-9385 or complete our Quick Response Form now so we can walk you through the bank negotiation process.
8) Deed in Lieu of Foreclosure
if you are unable to sell your house via “Short Sale”, you may also consider willingly giving your house to the lender, in which case the lender will pardon your mortgage debt. You qualify for a deed in lieu only if you are unable to sell your house prior to the foreclosure. While it still hurts your credit, it isn’t quite as bad as a foreclosure.
9) Sell your house “Subject To”
If there isn’t enough home equity for it to be a valid real estate investment, the investor may offer to purchase your house “Subject To The Existing Mortgage”. This means that they will pay the total amount in arrears to get the mortgage current and then proceed to take over your payments. The primary benefits are that you will be able to avoid foreclosure and once the investor begins making regular monthly mortgage payments, your credit will improve since the home loan will remain in your name. It will appear as though you’ve been making the mortgage payments yourself.
Some individuals believe that this form of purchase isn’t legal. They would be gravely mistaken. While it’s a “non-traditional” form of sale, it is both legal and enforceable. If you have questions regarding this form of transaction, it is advised to seek the advice of a Real Estate attorney rather than a conventional attorney who may not be fully informed on Real Estate Law.
Please note that we are not attorneys nor are we giving legal advice. We’ve just been around for a while and are familiar with the options available to stop foreclosure.
Facing foreclosure can be emotionally exhausting. You can avoid the pain of foreclosure when you know your options and take action before it’s too late. There may be a solution for you to help get your finances back on track and prevent foreclosure. If you don’t feel as though keeping your home is an option for you, complete our Fast Response Form an