Has your home foreclosed (or is about to) and left you feeling desperate and uncertain? Would you like the opportunity to get your home back, even post-foreclosure? You may be in luck.
There is a new option available which allows foreclosure victims to BUY BACK their homes from the bank. It is gaining momentum and may not be a viable option for a long time, but if you are in this situation and are employed, keep reading.
With all the options available to help struggling homeowners avoid foreclosure this is the first that deals with the problem after the fact, and believe it or not it IS working for many people. Some attorneys and non-profit groups have been very successful in submitting offers to lenders on behalf of the recently displaced homeowners.
In a sense this works like a loan modification after the fact, so the homeowner will still suffer some credit ramifications from the foreclosure, but will be able to buy their home back from the bank at a price that is comparable to recently sold homes in the area, which means monthly payments will be more affordable. Many of these homeowners were unable to work out modifications or use other options to save their homes, and many are still living there and have not been presented with a notice of eviction from the lender.
Why is this buy back option so successful?
1. It is unlikely that the lender, the new owner of the property, will find a buyer to purchase the home at a cost that would narrow the gap the lender has opened through the foreclosure process. Plus, in this market it is likely the home will sit for some time, causing further loss to the lender. Selling it back to the owner is a win-win, as there is no market time expended and no monthly payments to be doled out by the lender. A quick close can be arranged and everyone wins.
2. Abandoned homes can fall into disrepair. This can force the lender to pay lots of money for upkeep. A home that is not cared-for is unlikely to sell.
3. With credit damaged from the foreclosure it is not likely that the homeowners will be able to get a loan for a long time–this is the chance to stay in their home with an affordable payment, instead of putting them out on the street.
4. This option eases the lender’s already overflowing portfolio–it is one less home to worry about.
There is really no valid argument against buy backs. Some lawyers are already doing so and charge minimal fees to negotiate with the lender.
If you live in the San Diego area and would like a referral to an attorney who knows how to do this and has a success rate please feel free to email or call me and I will pass the information along. If you are in another area I would recommend calling real estate attorneys and asking if they do this, and if not see if they can refer you to an attorney who does.
Another option is to contact a non-profit group who can help you or point you in the right direction. If you live in Boston there is a group called Boston Community Capital, and they currently have about 30 borrowers in the process of buy back negotiations. You can call community resource organizations, the city offices, or call HopeNow and see if they can help. Their number is (888)995-HOPE.
Keep in mind that you DO have to be employed and be able to show that you can make the payments on the new loan. Also, your lender may have a clause in the paperwork that prohibits a buy back (or other language that can be interpreted to prohibit one). But don’t let this discourage you…it is still worth a try, and if you work with an attorney or organization who knows the ropes this may be sidestepped. If this is not an option for you I suggest you read up and learn all the possible options that ARE available before it is too late and your home is sold. A great resource is www.MortgageWalkawayOptions.com. Best of luck!