Pre-Foreclosure in St. Petersburg and nationwide are going into foreclosure, and buyers and mortgage holders need to understand the process.
Plan and simple: Pre-foreclosure in residential real estate refers to the period after a homeowner has missed mortgage payments but before the lender has taken possession of the property. It’s the phase during which the homeowner typically has an opportunity to sell the property to avoid foreclosure proceedings.
So what is a pre-foreclosure in St. Petersburg anyway?
Many homeowners in the United States and St. Petersburg are currently struggling to meet their monthly mortgage obligations.
When a homeowner falls behind on 3-6 months of mortgage payments, the lender will initiate a warning, alerting the homeowner to settle the debt or risk losing their property. This phase is commonly referred to as “pre-foreclosure.”
Typically, banks and mortgage lenders grant a three-month grace period for the homeowner to catch up on payments. However, this timeframe may vary depending on the financial institution and individual circumstances.
If the homeowner fails to rectify the overdue payments, the bank will proceed with foreclosure, seizing ownership of the property and displacing the homeowner. Fortunately, at this pre-foreclosure stage, the mortgage holder has several options available to prevent the loss of their home.
Pre-foreclosure Options for Borrowers
If you’re behind on mortgage payments, you’re likely to receive a “notice of default” from your mortgage lender.
This document will state that you have not made mortgage payments for the last 90-180 days. It’s important not to panic.
You have options that can delay or even prevent losing your home:
- If your mortgage is “above water,” (meaning you have equity in your house) you may be able to refinance your mortgage, receiving lower monthly payments. Check with your local St. Petersburg mortgage broker… or contact us and we can connect you with a reputable one.
- You may be able to quickly sell your home to a real estate investor that’s reputable in St. Petersburg like us at Bay Buy Homes, using the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments.We can buy your St. Petersburg FL area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
- You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off. In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
- You may be able to declare bankruptcy, which can buy you time to pay your debt. Bankruptcy will remain on your credit report for years, and can cause significant damage.
Lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers a lot of the time.
If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.
A foreclosure can often negatively affect your credit score by 200-400 points and can prevent you from obtaining a loan of any sort for 5-7 years, so be very dutiful if you’ve received a Notice of Default from your lender.
But if you’re not able to find a solution with your lender working directly with them… connect with us. We may be able to help.
Ways We Can Help If You’re In Pre-Foreclosure
- We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
- We can buy your St. Petersburg area house – We buy houses in St. Petersburg and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
- You can ask us questions and we can provide you FREE guidance and resources so you can make a well educated decision. This costs you nothing, there’s absolutely no pressure, no obligation… just free guidance without a catch.
If you’re in the pre-foreclosure stage… you’ve still got time to fix this situation.
Just connect with your bank to see if they’re willing to work with you… or contact us if you’d like to see what we can buy your house for or to tap into our free foreclosure foreclosure resources.
Quick Tip:
If you are in foreclosure, you can still prevent the foreclosure through the “right of redemption.”
The ‘right of redemption’ is a legal provision that empowers borrowers who have borrowed money for a property, such as a house, to halt the lender from seizing the property in a foreclosure. Let’s delve into the process:
- If the foreclosure process has already started, the borrower can stop it by paying the money the court says they owe.
- If the court hasn’t made a decision yet, the borrower can still stop the foreclosure by paying back everything they owe under the loan agreement, including any extra charges because they couldn’t pay on time and also the costs the lender had to spend to start the foreclosure, like lawyer fees.
- This can happen before the court officially says the property can be sold, or before the time the court decides in its decision.
- But if none of these things happen, then the borrower doesn’t have the right to stop the foreclosure. (According to Section 45.0315 of the Florida Statutes)