When it comes to purchasing a house and making it into a home, far from your mind is the intention of not paying your monthly mortgage. Unfortunately, unforeseen circumstances like the loss of a job, sudden illness, divorce, or death in the family, can lead to financial strain. Few homeowners actually plan to go into foreclosure, so when that notice arrives, reality hits. Nevertheless, failing to respond or taking proper action can make the situation worse.
Selling your house before the foreclosure process is complete, is a good move, and maybe the only real move you have if you can’t afford to bring your mortgage payments up to date.
Even if you may not want to sell, this can be the perfect solution when dealing with a home foreclosure.
As long as you can sell your house for more than what you owe the bank, the foreclosure process can be stopped. If you owe more than what your home is worth, you may need to look into negotiating with the bank to see if they will reduce your loan amount.
Keep reading to learn more about the foreclosure process in Milwaukee and if you can sell your house before you have a foreclosure on your financial record.
First, let’s cover the fundamentals.
Can You Sell Your House To Avoid Foreclosure In Milwaukee?
What Exactly Is Foreclosure?
Foreclosure is the process by which legally a mortgage lender attempts to recover the amount owed by assuming ownership of a property.
Simply put, foreclosure happens when you are unable to keep up with your monthly mortgage payments.
This allows the lender to ultimately seize your property to pay off the outstanding loan.
In some cases, you may voluntarily hand over the property to the lender.
In other cases, you may try to prolong ownership of the property for as long as possible to overcome the default.
Judicial Foreclosure In Wisconsin
In the state of Wisconsin, foreclosure is done through the judicial system. This means the lenders must go through the courts in order to foreclose on your house.
For a judicial foreclosure to begin, the lender files a summons and complaint in court. If the lender is seeking the right to collect any money still due after the sale of the home, it will include this request in the complaint. Typically lenders will also file a lis pendens, a document that serves as a public notice, identifying the property and describing the foreclosure action.
Once you receive the complaint of foreclosure, you will have 20 days to file a formal response in court. The response is your chance to address each statement in the claim, which means you can deny those you believe are not correct.
In the state of Wisconsin, the department of justice and attorney general have established a foreclosure mediation network. Several Wisconsin counties have their own mediation programs, but the Milwaukee county program is patterned after the Wisconsin foreclosure mediation model. In foreclosure mediation, you and the servicer work to come up with alternatives to foreclosure that would benefit both you and the lender. Some solutions include a repayment plan, loan modification, and short sale. Initially, this may be helpful but could just be putting a bandaid on the problem.
When it comes to legal matters and dealing with house foreclosure in Milwaukee, consider talking to a Wisconsin foreclosure attorney.
How Foreclosure Will Affect Your Credit
Besides losing ownership of your home, a foreclosure will do lasting damage to your financial health. Your credit score will drop considerably, and you will likely find it challenging to purchase a home in the future or qualify for other types of credit.
Typically foreclosure stays on your credit report for seven years unless you can file for Chapter 7 bankruptcy. Usually, after two years, your credit will begin to repair itself.
If waiting is something you would prefer not to do, your best options are to completely avoid foreclosure by selling your house or attempt to go through foreclosure mediation and keep a tight rein on your finances from here on out.
There are three ways a lender can obtain a foreclosure judgment.
- Default judgment- The lender automatically wins a default judgment when you do not file an answer to the foreclosure complaint.
- Summary Judgement- This is when you submit an answer, but the judge still finds the foreclosure should proceed, the court typically enters summary judgment in favor of the lender.
- Judgment after trial- If the case goes to trial, and the lender wins, the lender receives a judgment of foreclosure.
Wisconsin’s Right Of Redemption Period
In Wisconsin, you have the right to reclaim the property before the sale if you act within a certain time frame-called the redemption period. To reclaim, you must pay the entire value of the outstanding mortgage debt plus the lender’s attorney fees and costs. Regardless of what type of judgment you receive, the redemption period starts when the decision is entered, lasting from five weeks to one year, depending on the circumstances. When it comes to understanding Wisconsin law regarding the redemption period, it can be complicated; consider consulting with a foreclosure attorney.
Trying to sell your home before you receive your foreclosure notice would be recommended to avoid this altogether. It will also provide you with much needed extra time to find a buyer before any of the above can happen.
Traditional Sales Methods You Should Avoid
During foreclosure and the redemption period, you can sell your home. However, it probably isn’t in your best interest to hire a Real Estate Agent for several reasons.
- A realtor will have to list and advertise your home.
- An agent will get a large commission out of your sale price.
- The cost of commission, especially if your house sells for less than what you owe, may not be in the budget.
- Selling with a realtor typically takes an average of 3-6 months. If the housing market isn’t doing well in your area, this can spell trouble for you.
Numerous steps are involved when it comes to listing your home. Even if you are lucky enough to find a realtor who can help you move quickly to avoid foreclosure, they won’t be able to guarantee to find a buyer within your timeframe.
If they do succeed in finding a buyer and the buyer can’t close, you’re basically back to square one.
Ideally, the second you know you’re going to be behind on your mortgage payments and determine you don’t have the available finances to bring the mortgage current, you need to find the right buyer.
You need someone who can pay in cash, and can purchase your home immediately.
If you’re trying to beat the clock on your foreclosure, consider selling the house to a local real estate investor like Cream City Home Buyers. Real estate investors are private buyers who readily have funds available, which significantly simplifies the selling process.
Since you wouldn’t be working with a real estate agent, there are no fees or commissions involved. In addition to that, real estate investors generally pay all the closing costs and can close in as little as a week.
They will often negotiate with your lender on your behalf to assist in pushing the deal through before the foreclosure process moves along any further. This alleviates a major headache and allows professionals to deal with the hassle for you.
Cream City Home Buyers would be delighted to give you a fair cash offer for your Milwaukee home, allowing you to avoid the addition of foreclosure to your credit history. To get started, simply visit their website Cream City Home Buyers or give them a call at (414) 488-0082 today!