Is your trustee sale date quickly approaching? Like many Arizonan’s you are probably wondering what happens after the trustee sale. Maybe you’ve heard of people staying in their homes rent free for up to a year after their trustee sale date. Maybe you’ve contemplated a “strategic foreclosure.” Allow me to set some things straight and give you a little sound advise. I strongly suggest that you contact a real estate or bankruptcy attorney prior to taking any action regarding your foreclosure.
You own your home until the trustee sale. Homeowner’s can try for a loan modification or short sale until then. Lenders are not obligated to make arrangements to workout affordable payments, however. Many borrowers consider the servicer to be the lender, but there is actually an investor(s) involved that make the final decisions. In most cases loan servicers simply make requests to the Investor to modify a loan or allow a short sale. If you have a conventional loan, like most people, simply call your lender, ask for loss and mitigation and tell them you would like a loan modification package mailed to you. If your servicer is participating in Home Affordable Modification Program they are not obligated to modify your loan. It is ultimately up to the investor that owns your loan.
If your loan is FHA insured you do have options that will drastically reduce your monthly payments for extended periods until you are back on your feet. In addition, FHA is a little easier to deal with if you are attempting to sell your home short of what you owe before your trustee sale date. It is a common misconception that FHA short sales are more complicated than others.
The bottom line is do what is right for you. If you want to remain in your home as long as possible don’t count on the lender allowing you to prolong foreclosure by “strategic foreclosure” tactics. People that preach this sort of thing are unethical and you should be wary of them. If you truly desire to keep your home you should try for a loan modification repeatedly until you connect with someone who is willing to help you. Don’t take no for an answer. If you do not desire to keep your home then do the right thing and attempt to short sale it as soon as possible to minimize any further loss your lender will incur. After all, you bought the home. Like any investment, you know going in that there was a possibility of loss. Spare your lender further loss by modifying your loan or short selling your home today.