“I’m behind on payments… will I have to give my house back to the bank in Wisconsin?”
Losing a home is the the last thing any home owner would want. Sometimes unwanted life events happen and your financial commitments becomes difficult to manage.
If you don’t take action soon enough you may have to give your house back to the bank. No one in Kenosha-Racine WI wants to feel the effects of foreclosure. This could leave you without a place to stay, as well as leave a long-lasting impact on your credit. This will make it difficult to take out loans and buy a house in the future.
No one wants that. That’s not an ideal outcome. If it’s not too late for you, there is a strategy you can take today. The key to dealing with foreclosure is to take immediate action. Foreclosure is one of those things where you can be “too late.”
Here’s a brief overview of the foreclosure process
The foreclosure process can vary depending on location and the type of mortgage you have.
If you miss a few mortgage payments the loan company will start sending you warnings. If you fail to act on the warnings and don’t catch up on your payments, the loan company may put your home up for public auction.
Depending on how far along in the foreclosure process you’re in, you may still have some time, but not much. There is typically a redemption period before the auction where you still have a chance to pay off the full amount owed.
If you’re looking to avoid foreclosure in Racine, Kenosha, or Milwaukee counties, all auctions are conducted by the Sherriff’s department.
If you’re unable to cover the payment of the house before the auction, the successful bidder can evict anyone who remains in the house after the deed is transferred.
Fortunately, you have options!
If you wait until foreclosure on your home, it can have a devastating effect on your credit rating. One option to prevent this is to make an arrangement with the loan company called a “deed in lieu of foreclosure”.
This arrangement allows the loan company to take over ownership of the house. By doing this, the loan company saves money that would have gone towards foreclosure proceedings. Doing this is not considered a foreclosure. This benefits you by avoiding a foreclosure listed on your credit rating.
Another way to avoid foreclosure is by selling your house before it’s lost at the auction. To keep it simple, if your loan is paid in full, there will be no more penalties against you and your credit rating. (If your loan isn’t paid in full you will need to make up the shortfall).
Here’s an example: Let’s say you owed $100,000 on your home and you sold your home to us for $90,000. You would give that money to the loan company, along with $10,000 to make up the short-fall, and your loan would be paid off.
If you decide to seek a “deed in lieu of foreclosure” deal, contact a real estate attorney. They may be able to negotiate a deal where the loan company agrees not to go after the difference in exchange for the deed to the house.
I want to avoid giving my house back to the bank in Wisconsin!
Why do people choose to sell their home instead of going through foreclosure? (You still lose your house either way.)
The stress that foreclosure brings will continue to follow you even after losing your house. Because of the negative impact foreclosure has on credit ratings, it will continue to feel like you’re trying to climb out of a hole. In fact, going through foreclosure could impact your credit score by as much as 100 to 150 points. Selling your house before it is sold at auction will save your credit and allow you a better chance at rebounding.
Interested in learning more about a proactive option besides giving your house back to the bank in Wisconsin? Call us at 262-228-8505 or fill out the form to get more information