Foreclosure is something that nobody expects, but it can happen to anyone. Medical debt, COVID disasters, and over active HOAs are all common reasons why LA homeowners may be facing an issue of financial disaster and home foreclosure. When a home is foreclosed, the bank takes back the home based on the loan amount that is due, except in the cases of HOAs that rack up the fees until they can take action to foreclose on the house to cover the generated debt. No matter the cause, when you’re facing foreclosure, most people want to take control.
Foreclosure takes all the power out of your hands when it comes time to decide when and to whom you sell your house. However, if you take the necessary steps to avoid foreclosure, you can take back that control and get a better price for your home at the same time. You have a few options if you need to wipe out your remaining debt with the bank or get the best possible price for your house with no repairs and no time on the clock.
How can you avoid foreclosure in Los Angeles County? Let’s dive into your options.
Get Ahead of It: Approach the Bank First
The first and best way to avoid foreclosure is to get ahead. If you have financial problems on the horizon, approach your bank and let them know that you’d like to pay your mortgage but may not be able to. This flips the script. It shows your bank that you are a cooperative and responsible person, not just a “delinquent account.” You’re willing to work with them to find the solution that will limit the financial losses for everyone.
Your lending agent will then help you understand your options and pick the best path for your financial situation and your chance of repayment
Consider Alternatives to Foreclosure
Your bank will likely give you several options, though not all options may be available in all circumstances. The most common solutions to avoid foreclosure are forbearance, loan modification, short selling, and handing over the deed in place of complete payment.
Forbearance on the Loan: Repayment Terms
Often, families hit a rough financial patch when money is extremely tight, but these rough patches smooth out. The first option is usually the one the bank most prefers: forbearance. If they provide some time and patience, would you be able to get back on track by paying your mortgage in a month or a few months? Another job is secured, an unexpected insurance issue is sorted out, and money becomes available for the mortgage.
If this is your situation, ask for forbearance with a little extra time to get your mortgage back on track. Banks often prefer to provide this option to keep the mortgage rather than settle for a lesser option through foreclosure.
Mortgage modification makes it possible to adapt your current loan to the state of your future finances. After a divorce, for example, you may drop from two to only one income covering the loan. This may result in your finances being permanently changed – but you still intend to pay the mortgage. A mortgage modification adapts the monthly payments and duration to reflect your new financial situation and make payments possible again.
Deed in Lieu
Deed in Lieu is a financial, real estate term meaning “to give the deed instead of paying the loan.” The homeowner hands the deed to their property to the bank and the bank waives the entire mortgage. It’s a way to avoid black marks on anyone’s record or an unhappy interaction between the bank and homeowner, but no other value is recouped.
This solution is most common for newer mortgages with very little equity in the property.
Short selling is often the next best answer if the first two options aren’t available or practical. This is the most common way to avoid a foreclosure if you can’t modify or delay your mortgage payments. Short selling means selling the house for less than you owe and paying the bank back as much as possible. Depending on your bank and the sale, you may still owe the remainder, or your bank may waive the rest to close the account.
Short selling puts the power back in your hands by allowing you to choose who to sell your house to and which offers to accept, even if you are on a short schedule.
Your Options for Selling Instead of Foreclosure in Los Angeles County
If your home is at risk of being foreclosed, your best option is often to sell your house quickly for cash to get control of the situation. You can avoid a foreclosure on your record and the stress of going through the foreclosure process by selling your home fast to a reliable buyer with cash in hand. While you may not have time to go through the usual real estate staging and open house process, you have three good options for selling fast in the current market.
- Selling as-is to a motivated buyer
- Selling as-is to a home flipper
- Selling for cash to an investment buyer
- Motivated Buyer – Don’t underestimate the power of a high-demand seller’s market. Right now, the housing market is extremely hot. Between the housing crisis and California demand, if you list the house as-is for cash, there’s a possibility that a motivated buyer with cash in hand will make a bid that will solve or mostly solve your financial problems in selling the house.
- Home Flippers – If your home is in bad shape and you need to sell as-is with no repairs, home flippers may be your best bet within your timeline. Home flippers can take a home in poor condition and take the repairs off your hands.
- Investment Buyers – Real estate investment property firms like Sellers Advantage are like large-scale flippers with guaranteed cash ready for an offer. We buy LA homes fast; no repairs, no delays. We’ll get you an online cash offer within a few days and close within two weeks. Sellers Advantage can help you short sell without hassle or worry if your home is at risk of being foreclosed on. No more waiting and hoping, you can sell it right now.
Benefits of Selling to Sellers Advantage Instead of Foreclosing
- Preserve your homes equity
- Protect your credit
- Take control of the sale
- Stop worrying about the last-minute procedure
Why foreclose when you can sell? Here at Seller’s Advantage, we make it easy for homeowners to sell with a quick quote, offer, and closing process. We’ll buy your house fast for cash, no matter its condition. In return, you can protect your credit from foreclosure and retake control of the sale of your home. Stop worrying about staging or family buyers; we’ve got you covered.
If your home is at risk of foreclosing in Los Angeles County, contact Sellers Advantage today to “sell my house fast Los Angeles“. We look forward to helping you get the best cash value for your home.