Facing A Foreclosure

Facing a foreclosure, is an unfortunate part of our business.

And the reality of facing a foreclosure is felt by borrowers, brokers, and lenders, alike.

The story is always different but the result is the same, mistakes are made, payments are missed, foreclosure ensues.  Whatever the reason, as the broker, it’s always best to know the appropriate actions to take when a foreclosure arises.

So, what do you say to the panicked borrower who has been served with court documents at the commencement of a foreclosure?

Sadly, there are no magic words to douse the flames of anxiety. But despite this fact, recommendations for appropriate next steps is great way to offer your client a modicum of comfort in an otherwise stressful time.

Recommendations like:

• Inform the borrower that they need to communicate with the lender to see if they can work out a payment plan or sell the property.  Nothing puts a lender more on edge than a borrower who doesn’t communicate.
• Find out what stage the foreclosure is in. If they’re at the beginning of the process, there may be things you can do to help.  If it’s the day before the title transfers to a new owner, it’s likely too late.
• Have a detailed plan. When talking to the foreclosing lender, have a thorough and detailed plan ready to be suggested.  Simply asking for more time or for the lender to make concessions is likely going to be denied. Give the lender a reason to allow concessions or extensions.
• Remember, sometimes we need to face the hard truth. There are times when it’s just too late or the borrower’s problems are simply too big.  Be prepared to suggest that the best course of action is to sell the property quickly, if they can.  If there’s no hope, then adding more debt won’t help. It’s always better for a borrower to sell their own property rather than have the lender sell it for them.

As an MIC, foreclosure rescues are a regular part of our business.  If they can be handled correctly with an effective plan in place, there is often a path to saving the house for many of them.