3 Ways To Stop A Foreclosure | Real Estate Investing

In today's video, I'm going to give you 3 ways to stop a foreclosure. Coming up next. If a homeowner is more than 90 days on their mortgage payment, the lender's pretty much knocking or putting a notice on their door right now. The good news, they won't lose their home overnight. As an investor, there are multiple ways that you can help to stop that foreclosure and protect their home, or at very least, their Welcome back to the channel. My name is Joe Homs, and I have over 40 years of experience as a broker, investor, and mentor. Like this video to help me get in front of more new and experienced investors, anyone looking to create the life they've always wanted through real estate. What is a foreclosure? A foreclosure is a legal process that the bank takes to make sure that they get paid their monthly mortgage. If you stop making that payment, then they're going to take legal action against you, and that legal action includes a notice of default here in California. And they file a legal piece of paperwork saying that you have stopped making your mortgage payment, okay? And it's public record, and from that period on, you have 3 months And 21 days to cure that. If at the end of that 3-month period, which is called the pre-foreclosure period, you don't pay that, then they file what's called a notice of sale. That notice of sale is filed and then you have 21 days. In that 3-month pre-foreclosure period, if you decide you want to make up the back payments, they'll bring everything back current like nothing ever happened and you can continue paying. The monthly mortgage for the term of the mortgage. Once you go into that foreclosure period, that 21-day period, all bets are off. The bank wants everything at that point in time. So even if you tried to tell them, hey, I want to start this back up again, they're probably going to say no. Let's talk about 3 ways to stop a foreclosure process. Number 1, Easiest one, bring your loan current. And I know that sounds easy, but it may be difficult because maybe you lost your job, maybe something happened in life that you can't do that. But that's number one, bring it current. Number 2, try applying for a loan modification. Understand, probably 95% of loan modifications applications do not work. The reason they don't work is because let's say you're not making your mortgage payment because you lost your job. So what is the likelihood that you're going to get a job in the next 3 months and then start paying that mortgage again? If that's a good likelihood, then that's what you need to do— bring it current. But if not, they're going to look at it like, I'm going to pre-qualify this borrower once again, and I'm going to ask those questions. Are you employed? What assets do you have? They're going to go through all that just like you did when you got the original loan. They're going to go through that again. The minute they figure out that one, you don't have a job, so you're not getting any money, there goes the loan modification. So be careful of loan modifications. Number 3, short sale. Let's say you bought the property for $500,000 and you got a loan, let's say 100% financing like we used to do 10 years ago. And now the property is worth $400,000. So you can only sell it for $400,000, but you owe $500,000, hence the name short sale. So you're short paying off that loan to the bank. So the bank has to agree that the offer that you received at $400,000 is a fair and honest offer, and then they're going to take a loss for $100,000. That is what a short sale is all about. Missing payments on one's mortgage can be overwhelming. Helping the seller out in this situation must be dealt with empathy. You are there to solve a problem and in turn make a profit. When you're armed with the right information, know all of your options, and can make a well-executed plan, your odds of helping the homeowner come out of this situation with as little long-term damage as possible. Increases a lot. If you want to see how to find these leads, click on this video right here. As always, I'm always here to help.