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Avoiding Foreclosure

This topic is very important to me. I've seen a lot of mis-information out there and want to clear some of it up. I am a real estate agent, my career of choice. My job is to put people in to homes, not take them out of it. Foreclosure is something that NEVER has to happen. It is true, it does happen, but with the right information it can be avoided.

Don't avoid talking to your lender...this is the worst thing you can do. The lender doesn't want your home!

There are a lot of questions that need to be answered before you continue to go forward and make an informed decision. The first question that I would ask yourself is "Has the situation that caused the default been resolved?" If your answer is yes, then your next question is that if you were all of a sudden brought current "Could you continue with your house payments without a problem?" If your answer was yes again, then you can, 90% of the time, keep your home and avoid foreclosure. (Don't fall for the short sale con-artist) My suggestion to you at this point, is to call your lender and try to set up a one-time forbearance. (A forbearance is a postponement of loan payments, granted by a lender or creditor, for a temporary period of time. This is done to give the borrower time to make up for overdue payments.) Also you could possibly have the default amount added to the end of the loan.

Now, let us take a look at your options if you answered no to either of the earlier questions. If you still want to try to keep your home and have enough equity, if you act fast enough you maybe able to refinance and lower your payments. Hopefully giving you enough space between your current payments and what the payments will now be that you can afford to keep the home.

OK, worst case scenario you can't afford to keep up on payments, the situation hasn't been resolved and you don't have enough equity to refinance. Now you are being told the only option you have is to sell your home on a short sale and get nothing in return besides not having a foreclosure on your record. DON'T BELIEVE THAT! Even with NO EQUITY you can make $25,000, $50,000 or maybe even $100,000 on the sale of your home. The key is hiring a Realtor that understands creative financing and has buyers that are ready, willing and able to buy today.


For math purposes I'm going to use the even number of $300,000.

If your home is worth $300,000 and you owe $299,999 most people will tell you your only option is to give your home back to the bank. THIS IS NOT TRUE!

If you have a loan for $300,000 at 6.5% and your default amount is $7,000 and your Realtor charges 6%.

If you sell your home on creative financing you can sell your home for $310,000 with 10% down.

$31,000 down ($18,600 for Realtor fees, $7,000 for your bank)

Leaving you $5400.

Now if you finance the remaining $279,000 at 7.5%

Your monthly payment on $300,000 @ 6.5% = $1896.20

The payment from the new buyer at $279,000 @ 7.5% = $1950.81


To know all you options, visit 

Respect Realty LLC (Expect More)


At Respect Realty, LLC our agents believe in 100% dedication to client satisfaction.  We specialize in property and land acquisition around the Portland Metro and Vancouver, WA area. We delight in working with first time home buyers and sellers to guide them from start to finish. Our doors are always open and we are always happy to assist you with your real estate questions.


Reach out today, we look forward to talking with you!


Todd Clark and Seraina Aguayo (Owners of Respect Realty)

Respect Realty LLC (Expect More)



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Comment balloon 3 commentsRespect Realty LLC • January 17 2007 03:48AM


Can you explain the due on sale clause?  

Here is my advice for folks whose mortgage loans are delinquent, in default, or in foreclosure:

Don't panic.  Get detailed information about the deadlines you face. Pay special attention to the date on which you would lose legal ownership of your home.   

Never sign a contract under pressure.  Take your time and consult an attorney if possible.   

Never sign away ownership via a quitclaim deed or other means without consulting with an attorney.   

Never make your mortgage payments to anyone other than your lender.  If you can't pay, never ignore warning letters from your lender.  

Beware of any home-sale contract in which you are not formally released from liability for your mortgage loan. Make sure you know the rights you are giving up and that you agree to give them up.   

Don't sign anything with blank lines or spaces because information could be added later without your knowledge or consent.   

If you do not speak or understand  English very well, never rely on the Buyer's translator.   

Si usted no habla ni entiende inglés bein, no confíe en el traductor del comprador.

Posted by David Petrovich (S.P.O.C.H. a 501c3 Charitable NP) over 12 years ago
I feel there are some loan officers that SHOULD be held accountable. There are some very unethical loan officers out there. I was the unfortunate victim of one being a first time homeowner. Take a look at my blog if you like to get a idea of what i am talking about.
There is just way to much that happend to write here.  I am fighting back though through my attorney general and the dept of financial and professional regualation. Thankfully I plenty of documentation other than closing papers that are going to assist attorney general in hopefully holding this UNPROFESSIONAL loan officer responsible.
Posted by STEPHANIE over 11 years ago

David - Thank you for your input and hopefully some people will listen.

Stephanie - True there are some out there, but 99% are great and are ethical, I'm sorry you had to run in to the one that wasn't and I hope you do get them out of the business, so he doesn't do this to anyone else.

Posted by Respect Realty LLC, Brokers - Oregon / SW Washington Real Estate (Respect Realty LLC) about 11 years ago

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