May 17, 2014
Although a damaged property is also declared as a distressed property, however, a mortgage advertises a property only when the borrower fails to pay the loan back for at least 3 months. The property is then declared as a foreclosure property. The process of declaration occurs when the mortgage files a public notice declaring that the property has been notified and listed as a foreclosure property due to the insufficient payments, and will continue to be the foreclosure property unless the borrower pays the loan back.
If your property has been listed as Foreclusure, there are still ways you can save it, it all depends on the reasons for foreclosure which can be, not maintaining the property, not recovering the damages, causing losses and damages to the property etc. However, the 95% cases of foreclosure property are due to the non-payments.
In case of any of the above reasons the mortgage will then open the property for auction, in which most of the distressed properties are bought by people who flip houses or deal in distressed properties. If a  sale does not occur in the auction , then the property is handed over to the real estate agents for sale.
Tips on Saving your Property from Foreclosure
Pay Back your Loans
The first technique of saving a distressed property is quite simple, paying the loan back. If you have gotten stuck in any such situation, then best way is to borrow some money from a family member, a relative or a friend and pay the loan back. The amount you would need to pay would be limited to the ‘unpaid’ part of the loan only, however, there are different rules in different states. You might be charged with late fees as well.
Self Bidding on the Auction
During auctions, the real estate agents and distressed property businessmen buy the properties by placing bids on them. The higher the bid is, the greater is the chance to own a property. You can someone you know and Trust to bid on your property and buy it for you. In this way, your property would transfer from the mortgage to the friend or relative. Be warned though, the person who you trust to bid on your property will end up Owning your property, do this only if you really trust the person, and know they wont stab you in the back.
Unpaid Taxes can be a Godsend
A property cannot be placed for action unless its taxes are not paid. A mortgage company pays the taxes first before placing the property for auction. Planning to stiff your taxes so you can get more time to pay your loans can be tricky though, make sure you play it right. You can pay the loan back in the time it takes for your mortgage to clear your taxes to list your property.
Negotiate the Mortgage Payments.
A mortgage will have to abide by the laws of the state, however, you can ask for some more time with promises, good communication skills or signing a new contract with the mortgage, stating that you will pay the loan in a certain amount of time.
Fix the Damages
Some People fall in the unfortunate 5% , who are lose their property due to ‘other’ reasons, For example, if a mortgage has foreclosed the property due to damage, then the borrower can fix the damages to the property and the mortgage will take the statement back. For further exceptional cases, you can talk to a real estate consultant you trust.
Don’t lose hope if your property is listen in foreclosure, Remember, that all the properties that are listed in the foreclosure section are not sold, a Good many properties are saved by their owners!