As a Pleasanton Broker, all too often, I come across a distressed homeowner, who against their better judgement hired and paid upfront for loan modification assistance. I learned of another case of this just yesterday when talking to a distressed owner.
The auction date is scheduled and the homeowner panicked after recieveing 3 separate denials from their lender to modify the loan. The homeowner told me that she’d spent a lot of money, more than $800, for a “law firm’ to work on a modification.
She said she was aware of law SB94 about NOT paying upfront fees, but her husband had made the decision to do so. It is very unsettling to see this happen to those already under so much stress and confusion about the situation.
If you find yourself in this situation of being denied a modification and needing to choose short sale or foreclosure, here is my advice (having dealt with banks in these situations over the last few years for my clients).
When they tell you you do not qualify for a modification, they actually set up an auction date to sell the property at the court house steps. At this point, a decision between short sale or foreclosure needs to be made. The auction dates can and do get postponed, especially if you list the house for sale, however if you ignore making the choice and there is no headway being made, someone will knock on your door and say they are the new owner.
I’ve witnessed this last year with an elderly lady that did not believe she deserved to have her house taken and was planning to keep it, however she had an upcoming sale date. About a week after I talked to her, she called me crying that the house was being sold that morning. At that point, although I made calls and inquired about stopping the sale, her choice between short sale or foreclosure was simply too late! The house was sold and by noon, the new owner knocked on her door to let her know he was the new owner.
Some people expect they will get a notice from the bank about the sale date. What they may not understand…a notice was given and in some cases maybe 12-months prior when the payments were no longer being made by the borrower. It is called an NOD (Notice of Default).
Once that notice is delivered, regardless if 12-months, 24- months later, and a homeowner has been able to slide under the radar without making payments, the house can be auctioned out from under the current owner. At that point, the homeowner is basically ejected from the home.
Difficult choices need to be made. Do your homework. Consult with professionals, licensed and in good-standing. Check licenses, check expiration dates and google these individuals before hiring them.
I have a great list of professionals to help distressed homeowners make these difficult decisions between short sale or foreclosure. Just send me an email and I will happily forward you names. It is advisable to speak with a Real Estate Attorney, Tax Attorney, and/or CPA. Making the wrong decision regarding short sale or foreclosure could follow you for several years.