The 6 Most Important Time Considerations When Facing Foreclosure

Once you miss a mortgage payment, it can feel like things are spiraling out of control. Many homeowners tell me that they lay awake at night praying that the bank doesn’t show up the next day to take their home.

It may feel like you’re at a fork in the road – part of you just wants to bury your head in the sand “let the bank take the home” while the other part of you knows that you’re strong enough to regain control over the situation and level the playing field with the bank.

If you’re ready to make a plan, you may consider reaching out to an attorney for some assistance in discussing where you’re at, what you need, what’s realistic and where to go from here.

If you’re going to handle the process on your own, make sure you take into account the 6 things below:

1. Where are you on the foreclosure timeline?
2. This is the #1 thing you should figure out.
3. Understanding what has happened and what is going to happen will immediately remove the fear of the unknown about the process and leave you feeling empowered to start looking at options to avoid foreclosure.
4. I speak to people who are often surprised by how long they have. Washington has a relatively long foreclosure timeline, so understanding where you fall will make you feel better and will open up doors for solutions.
2. When does mediation become available to you?
3. As a homeowner in Washington you may be eligible for a very important process called mediation. Mediation under the Foreclosure Fairness Act becomes available to eligible homeowners once you receive a Notice of Default.
4. Mediation can stop the foreclosure activity and prevent the bank from filing the final foreclosure notice. It brings the bank to the table to negotiate and discuss solutions without the pressure of foreclosure looming over you.
5. The eligibility to file goes away 20 days after your final foreclosure notice is recorded, so make sure you know when you become eligible for Mediation to ensure you’re taking advantage of all your legal rights against the bank.
3. Are you going through a lender review period (for loss mitigation options)?
4. Loss mitigation options like loan modifications, repayment plans, short sales, deed in lieus etc., all need to be reviewed by the lender. Unfortunately the review process can be anything but quick and easy.
5. Lenders will tell you that the review time to produce a decision is 30-days.
6. What they fail to mention is that the 30-day review timeframe starts to run from the moment they deem the application complete.
7. This is subjective at times and can make the process very hard.
8. Because the application requires lots of documents and lots of work on the lender’s end to review them all, if you’re doing this review on your own without the help of a professional – you should probably factor in a full 90-days for the review to be completed and a decision issued.
9. The best way to help yourself here is to hire a professional who can focus daily on getting a decision back as quickly as possible. But, if you’re going at it alone, make sure to factor in the review period AND potential time to appeal the decision into your timeframe.
4. Do you have a back-up plan if your first plan doesn’t work? 
5. Once you have missed a payment and are in foreclosure, you should always have a foreclosure prevention plan with a last resort option if your first few options don’t pan out.
6. Never put all your eggs in one basket, especially if the lender has discretion to deny you from the option you want.
5. Do you value time in the home over money (when selling the property)?
6. You may want to stretch out the foreclosure timeline as much as possible, live in the home for free for as long as possible, and then sell the home right at the end of the foreclosure timeline if you know the household income won’t recover.
7. Or, you may want to get out quickly so the amount you owe the bank doesn’t continue to grow. Time in the home (for these people) is less important.
8. It doesn’t matter which priority is more important for you – but it does matter that you know which one you value and have a plan in place to get what you want.
9. If you’re considering selling the property to avoid foreclosure, have this conversation with yourself, determine whether you value time over money and then make a plan that works within the foreclosure timeframes based on where you’re at.
6. Have you factored in enough time to account for your buyer walking away (if you’re selling the property)?
7. If you’ve decided to sell, you should make sure you’re working with an agent who understands distressed home sales. You should also consider working with a Distressed Sale Manager.
8. If you’re going at it alone, make sure you’ve allotted enough time for a potential buyer to walk away from the transaction.
9. Buyers walk away from real estate transactions – this is just a part of real estate. If you list the home and give yourself just enough time for one buyer to close, this will be stressful.
10. So, pay attention to your foreclosure time frame and factor in enough time to sell the home assuming one (or multiple) buyers may walk away.

It can be difficult to consider everything at once and make yourself a plan. You don’t need to feel alone in the process – you can always call for help so you can hear which time considerations apply to you so you can walk away with a plan: (425) 654-1674.