Can I Sell My Home If It’s In Foreclosure IN?

Foreclosure occurs when a homeowner is unable to make their mortgage payments on time and has no way to catch up on the missed payments. Because a mortgage is a legal agreement between you and your lender, once you’ve defaulted on the loan, the lender can auction off the property to cover any outstanding debts, leaving you homeless and with terrible credit.

No one wants to receive a notice of foreclosure, and yet in a nationwide study, nearly 1 million Americans were afraid of losing their homes (U.S. Census Bureau Household Pulse Survey, fielded from July 27 to Aug. 8, 2022). And foreclosure can occur for a number of reasons, including:

• Job loss and loss of income
• Divorce or death of a spouse or partner
• Mounting debt, including medical and credit cards
• Moving without being able to sell the home
• Natural disaster

Middle America Homes is a local company operating in IN that has built its business by buying distressed houses and properties in the area for cash. They promise competitive cash offers without the hassle of dealing with real estate agents, title companies, traditional bank financing, and more!

What is Foreclosure?

Let’s say you or your spouse recently lost your job. You still have the same bills to pay, but unfortunately, you don’t have the money to cover your expenses, including your mortgage payment. What happens now? Even if you find another job, the amount of debt you’ve accrued during that time might be too large to pay off within a reasonable period. When this happens, the bank may begin the foreclosure process.

How Long Do You Have To Get Out of Your House After Foreclosure?

The steps in the foreclosure process in most states include missed payments, public notice, foreclosure, auction, and eviction, but the timeline for each step varies by state. You could have anywhere from 120 days to nine months before the bank is able to move forward with either a judicial or nonjudicial foreclosure. During this time, your lender may reach out to you by phone, mail, or email to inform you about the process and possible next steps.

The Different Types of Foreclosure

There are two types of foreclosure you may experience: nonjudicial foreclosure and judicial foreclosure.

What Is Non-Judicial Foreclosure? 

A nonjudicial foreclosure is the fastest and least expensive way for a lender to foreclose on your IN property. It does not require taking you, the homeowner, to court and can be completed according to state statutes. In a nonjudicial foreclosure, your lender repossesses your home and sells it to recover the outstanding debt using what is known as a “power of sale” clause in the deed of trust. Not every state allows this option, but if yours does, the lender will generally choose it to avoid court costs.

What Is Judicial Foreclosure?

In states that require judicial foreclosure, your lender must file a lawsuit asking the court to issue an order allowing the sale of the home. The lender must formally notify you of the lawsuit. Whether you agree or not, you must respond, or the lender may automatically win the case and be permitted to move forward with a foreclosure sale. When the house is sold, you may still be responsible for paying the difference between what you owe on the mortgage and the amount the house sells for.

Auctions are not like traditional home sales, and homes are often not sold at full market value. This means that even if your house is in great shape and worth much more than what remains on your mortgage, you could still end up owing tens of thousands (if not hundreds of thousands) of dollars for a house you no longer own. This is called a deficiency judgment. Because pursuing a deficiency judgment can be expensive and time-consuming, many lenders prefer nonjudicial foreclosure when it is available.

How to Sell House Before Foreclosure in IN

Let’s break down a few ways you can sell your house, depending on your timeframe and situation:

Hire A Real Estate Agent

The first step most Americans think of when selling a house or property is reaching out to a local real estate agent. However, there are pros and cons to this option, especially if you are in a difficult situation such as foreclosure. A good real estate agent can list your property on the MLS and help you prepare it for open houses and showings. However, they do this work in exchange for a commission, which means that at closing, a significant portion of the proceeds from the sale of your home will go toward the agent’s fee.

When you’re already dealing with a mountain of debt and need every penny to pay back your lender, a commission of 3% to 6% of your final sale price may be more than you can afford to give up.

Additionally, there’s the uncertainty of not knowing when your house will actually sell and close. Realtors may make promises, but at the end of the day, you still need to find the right buyer and typically wait 30 or more days for a traditional closing. For homeowners facing auction or eviction, even waiting one month may be too long.

Short Sale

If you owe more on your house than it’s worth, your real estate agent may recommend what is called a short sale. A short sale occurs when you owe more on your mortgage than the property’s current market value. For example, if you owe $200,000 on your house but it is only worth $150,000 in today’s market, you may need to pursue a short sale. While it may seem like a good option, it is rarely fast or simple.

To begin, you will need your lender’s approval. To qualify for a short sale, you must demonstrate financial hardship by providing documentation such as W-2 forms, medical bills, and other supporting records. In cases involving loss of income, the lender may require proof that the hardship is long-term and unlikely to improve in the near future. If the lender approves the short sale, you will need to work with a real estate agent and an attorney who specialize in short sales. They will typically charge fees similar to those associated with a traditional home sale.

If your foreclosure has not progressed too far and you have maintained communication with your lender, there is a good chance they will approve the short sale. This allows the lender to avoid the time and expense of completing a foreclosure while recovering a portion of the missed mortgage payments. However, for many homeowners, the impact of a short sale can remain on their credit report for five to seven years.

Although you may be able to pay off part of your debt, a short sale can significantly affect your credit—similar in some ways to declaring bankruptcy. Credit reporting agencies will reflect both the delinquent mortgage payments and the short sale on your credit history, which can make it difficult to qualify for a credit card, auto loan, or new mortgage for several years.

Sell Your House AS-IS to A Cash Buyer

If you’re under a strict time constraint to sell your house before a foreclosure progresses to auction and eviction, you still have options. You can try selling your property with a real estate agent, work with your lender to complete a short sale, or—best of all—turn to a trusted and reliable cash investor for help.

Some of the benefits of selling to a direct cash investor include:

• A quick and pain-free closing process
• No commissions or fees
• No need to market your home or wait for a buyer
• No need to clean up or complete any repairs

When you sell your home as-is to a direct cash buyer, you can avoid losing your home to an auction and move forward on your timeline.

Can You Stop Foreclosure Once it Starts?

Pay Off Your Loan & Fees

You’ve found yourself in a difficult situation. Your debt is increasing while your income remains the same. It’s time to take a serious look at ways to pay down your debt quickly.

Do you have any assets you can liquidate? Is there a trusted friend or family member who may be willing to gift or loan you money until you get back on track? If you’re committed to stopping foreclosure and regaining control of your finances, consider working with a financial professional who can help you restructure your budget.

You can use one of these solutions or combine several of them to start tackling your debt and move toward a more stable, less stressful financial future.

Declare Bankruptcy 

As a last resort, filing for bankruptcy may help stop the foreclosure of your home but it comes at a significant cost. The bankruptcy process is complex and typically requires hiring an attorney who specializes in bankruptcy law.

If the court approves your petition, you may be required to complete a government-approved credit counseling program. The bankruptcy will also remain on your credit report for up to seven years.

Bankruptcy can affect many areas of your life, including your ability to purchase a car, apply for a credit card or bank account, and qualify for future rentals.

The Homeowner Affordability and Stability Plan (HASP) 

If your debt is higher than your income, you may be eligible for the Homeowner Affordability & Stability Plan (HASP). HASP is a loan modification program designed for borrowers who are at risk of foreclosure due to insufficient income.

This government program was created to help homeowners in the United States restructure their monthly mortgage payments to better fit a limited budget. Apply for the program here to see if you qualify.

Sell Your House Fast to a Cash Buyer 

Are you ready to sell your house but don’t want to wait 30+ days for a traditional closing? Worried that a short sale might hurt your credit? Looking to pay off your debt quickly and get the bank off your back? A direct home buyer or cash investor could be the solution you’ve been searching for!

By working with a trusted and reliable investor with a strong reputation in your area, you’ll find a company ready to buy your home as-is, with cash on hand and no delays. Selling to a cash buyer allows you to avoid the lengthy processes of foreclosure, eviction, or auction often closing in just a few days—while protecting your credit.

While selling to a cash investor may mean you don’t receive full market value, the benefits often outweigh this. You skip fees, inspections, and commissions, and the fast closing can help you sell before the bank auctions your property. This ensures you get a price that works for you, rather than the pennies-on-the-dollar the bank might accept to remove the property from their books.

We Buy Houses in Foreclosure & Pre-foreclosure – Get Your Offer Today!

Does the idea of finally walking away from a property without the storm cloud of foreclosure hanging over your head? Contact a real professional at Middle America Homes to find out more and get a fair cash offer for your property today.