I have been notified of foreclosure (by phone) what are my options?

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I have been notified by phone that because my mortgage is 5 months past due they will submitt for foreclosure. What about if they do and I get the account current in two months? what is going to happen now? what is the time frame? The loan is with Washington Mutual.

  1. Reply
    Ron B
    May 2, 2011 at 3:31 am

    If you have the money to come current, you can make the payments plus any new fees and keep the house.
    If you have no cash, but do have equity you can do a quick refinance and save the house that way.Of course you will have to go to a subprime lender, so it will be expensve. you could then sell the house and keep the remaining equity.
    Otherwise you will have a couple of months before they give you a notice of eviction and you lose the house. Your credit will be shot, and you may still owe some monies if the bank cannot recoup thier loan.
    If option two is where you are, I can help.

  2. Reply
    May 2, 2011 at 3:49 am

    Hopefully Washington Mutual has an affiliated Partner that helps them to salvage foreclosed properties like a “Workout” Department”. If so they want to know if you can still afford to pay the mortgage and what caused you to fall behind. It its determined that you can still pay, they can put you on a special temporary payment plan. If you can keep to the plan you have ‘cured’ your Foreclosed status.

    The only way you can have it ‘current’ in two months is if you can come up with the total of what is past due plus the legal costs of the foreclosure procedure. That usually is a ton.

    The work out route might take up to 7-9 months.

    Another alternative is to re-fi but since the credit rating is harmed the re-fi rate is going to be higher than your original one and may be too expensive in the long run.

    GOOD LUCK!!!

  3. Reply
    May 2, 2011 at 4:00 am

    Option 1 – pay your mortgage to current including any attorney fees.

    Option 2 – refinance your home as quickly as possible. Find a mortgage broker. They specialize in poor credit. Very few lenders will allow you to refinance in forclosure but there are still some who will. You’re rate will not be good. Expect around 12%. Try to avoid a prepayment penalty if possible. If not, try not to take more than a 2 year prepay. You won’t have your credit pulled up enough to improve your rate. Within 2 years if you pay on time you should be able to refinance and get that rate down. It’ll take time but it’s better than losing your home and having a forclosure on your credit.

  4. Reply
    Brian B
    May 2, 2011 at 5:00 am

    Talk to Washington Mutual. Make sure it is the right person. Once you have someone who can help you ask about a forbearance agreement. This will save them the costs of a foreclosure and will let you have time at a negotiated payment rate to get caught up. If not you are going to be in a lot of trouble trying to refi…. WaMu doesnt want to foreclose however they can’t allow you to NOT make payments either….
    Good Luck

  5. Reply
    May 2, 2011 at 5:30 am

    If you get the account current, then the foreclosure process will stop. Since WaMu is foreclosing because you are not current on the loan, if you become current, they will have no cause to pursue the foreclosure.

    Be careful of the pending foreclosure, though, and do whatever you can to postpone it. Once you are in foreclosure, extra bank fees and attorney fees will start appearing, and you’ll have to pay those off before your loan is current again. So, in effect, you’ll have to pay the 5 months your behind PLUS any extra fees they throw at you. And if you are actually in foreclosure, the extra fees can be a lot higher. So do whatever you can to avoid being put into foreclosure. Cry, plead, beg, whatever it takes to keep your reinstatement amount as low as possible.

    This is assuming that you’ll pay them back, though. The crying/pleading route usually won’t work if you end up not having enough money to get current. The method will probably backfire if they postpone the foreclosure for you and you end up getting even further behind.

    In terms of a time frame, it usually take 3-6 months for a lender to put a loan into foreclosure, although it is up to them when they actually transfer the paperwork to their foreclosure department, hire attorneys, and sue you. They make that call, so keeping in good contact with them will help you.

    The foreclosure process is determined by state law, so the actual timeframe of when the loan goes into foreclosure until the sheriff sale, redemption period, and eviction will be based on the law. You can probably search online for your state’s laws and find out what time frame you are looking at for the entire process to be finished.

    Good luck, hope that helped.


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