There is a LOT of information out there on the web about foreclosures and foreclosure avoidance, as well as MIS-information. While we are not attorneys, we have been told by our attorneys the general information below.

Once a property has been placed into foreclosure, the owner needs to do something about the problem because it just won't go away on its own. Some people wait until the last minute of the last day before the sale before they take action, but then it's just too late to do anything about the problem. The property will go to sale, and the owner will have to move. The seller will receive absolutely nothing out of the sale.

Once a property has been foreclosed on at the sheriff's auction, the foreclosure will go on the homeowner's credit report. This is absolutely hands down the WORST mark against someone's credit. Home lender's will NOT lend to this person again for at least the next 5 years. This is worse than a bankruptcy, and it just won't go away.

Here are the property owners options:

Sell Outright: If there is sufficient equity in the property, the seller is fully capable of selling at a discount in order to get a fast sale, even while in foreclosure status. This is no time to 'wait' for a full-price offer, given the current housing market. There is a gluten of properties on the market, and only a handful of qualified buyers. This is truly a buyer's market, like none we've seen since the S&L crisis of the '80s. If you are fortunate enough to have equity in your property, you can sell now by owner, get at least a little for your equity, and put this tragedy behind you.

Short Sale: Unfortunately, most homebuyers bought with little to no money down. These homeowners cannot even list their home because there is not enough equity to pay for a realtor's commission to sell their home. Many times, the house is worth LESS than what is owed. Or, if there is a little equity, there is no bargaining room that many homebuyers today are requiring. This is just a lose-lose situation, and many homeowners feel trapped. While most professional house buyers today will walk away to greener pastures from situations like this, we are able to come in, negotiate with your lender for a discount, and buy your house. If this is the case for you, and you've come to the realization that you will have to sell quickly to save your credit, let us work with you. Fill out our property information page, and we will contact you with a solution to your problem if we feel we can help.

Bankruptcy: This is one area that has the most mis-information about. Homeowners in foreclosure will most likely take this route as a last resort, thinking this will stop the foreclosure process dead in its tracks. This could not be further from the truth. This only puts the foreclosure on hold, and most of the people taking this route cannot repay their debts according to the court's repayment plan. They will end up with not only a bankruptcy on their credit, but a foreclosure as well. You might as well give up any hope of becoming a homeowner again for at least 7 years. We buy quite a few properties out of bankruptcy because the homeowners are just not able to keep up, and they are forced to sell.

Repayment Plans: Forbearance and Loan Modifications plans are typical for many lenders, however these solutions are a last minute resort for the lenders to get as much cash out of the homeowner before the inevitable: the sheriff's sale.

• Forbearance plans typically have the homeowner repay the back payments, spread out over maybe 12 months (maximum), along with the current monthly payment. This is a plan set up for failure. Unless the homeowner has really fixed the problem that got them into the foreclosure  mess in the first place, the homeowner is most likely going to fail to make up these payments within the first 3-6 months. Once the homeowner is late, even for 1 day, with the new repayment plan, the deal is OFF, and the lender will resume the foreclosure. THIS HAPPENS ALL THE TIME. The lender knows that most homeowners that are in foreclosure will end up not being able to keep up with the higher payments, and is just attempting to squeeze out every penny they can.
• BETTER: Loan modification is another form of repayment plan. This is where the lender makes a permanent change in the terms of the loan. Maybe they will change the rate, or extend the term of the loan. Either of these cause re-amortization of the loan with a new payoff schedule. The idea behind this is to offer the homeowner a payment they can afford. However, the homeowner's initial situation that caused the loss of payments must be corrected. i.e. they obtained new gainful employment after being laid off.

Deed-in-Lieu: This is where the lender will have the homeowner deed the property back to the lender to avoid the foreclosure. The problem with this program is that it still affects them just as if the house went into foreclosure. This may show up as a foreclosure on their credit report, and their hopes of becoming a homeowner again in the near future are dashed.

We hope that this has answered many, if not all, of your questions regarding your options if you are in foreclosure..