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The thought of foreclosure can paralyze with fear anyone who has missed or is contemplating missing a mortgage payment. "Please don't sell my home on the courthouse steps!" "Please don't foreclose on me!" That first missed payment places the homeowner in the foreclosure arena, whether or not the lender takes action. In Maryland, that means a foreclosure consultant must be involved in any discussions concerning purchase of the property.
But what if you don't want to sell? How do you avoid the courthouse steps? Finding the money to make on-time payments and catch up on missed payments is the ideal solution. That works if the problem is temporary. Most mortgage payment problems, however, are caused by changes in the homeowner's life--such as death, divorce, illness, loss of employment. Another common problem in today's market is the resetting of adjustable rate mortgages, which can price the monthly payment above an affordable level. This is especially true if taxes and insurance rates go up at the same time.
This first phase of the foreclosure process is called pre-foreclosure. Homeowner actions during this period range from denial to borrowing money for payments to negotiating new terms with the lender. If nothing gets settled, the lender will schedule the property for auction.
The auction itself is phase two, when most properties are sold on the physical steps of the county courthouse. The auction may be delayed several times during negotiations. An auction can be stopped right up to the minute it takes place. It's often assumed that auction is a good place to buy cheap houses, but most are returned to the lender instead of being sold. Buying a house at a foreclosure auction can result in months of waiting, while taxes and fees accrue, and without access to the almost-purchased property.
Phase three, after the auction, is when the house actually becomes a foreclosure property. A common term is REO, which means Real Estate Owned by the bank. REO properties are usually listed by real estate agents. Some fall into disrepair due to vandalism or mold damage, and some are well-maintained. Although banks don't want to own properties, they also don't seem to want to sell them. The process is usually cumbersome and the price frequently high.
In some states, those with a right of redemption, homeowners can get their property back after a foreclosure auction by catching up on missed payments and taxes. A sale on the courthouse steps does not have to be final, although not many houses get redeemed in this fashion. Most sit empty for months before being sold to investors or energetic homebuyers.
buymyemptyhouse.com is a group of real estate investors in Prince George's County, Maryland, established to stop the bleeding caused by an empty house and to turn these houses into homes once again. We are seeking to buy empty houses in Upper Marlboro, Bowie, Clinton, Hyattsville, Temple Hills, Suitland, Capitol Heights, District Heights, and surrounding towns. Contact us if you own a house and can't make the mortgage or tax payments.
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