Is it possible to sell the house after the foreclosure process has begun?
Once the process begins, there are chances that you can lose your home. The laws vary from state to state. If your lender is using a non-judicial foreclosure process, it can take a few weeks to a few months before the bank takes over the property. During this time, you can use a foreclosure prevention strategy to save your home.
If paying the mortgage is not an option and the house is unaffordable for you, it’s best to sell the house or negotiate a short sale with the lender. Selling the home protects your credit history. You’ll be able to apply for a new mortgage when your finances become stable again. In this regard, it’s essential to note down a few things.
Lenders Prefer Mortgage Refinancing Over Foreclosure
A foreclosure is a nightmare for any homeowner. To a lender, a foreclosure costs time, money, and reputation. Banks don’t want to foreclose, own, and sell properties. They’re in the business of lending money, and whenever possible, it’ll be best to avoid the headache of foreclosing a house.
That’s why banks are more interested in coming up with a mortgage refinancing plan or sometimes a short sale. A short sale is often their last attempt to recover the investment, but it’s preferred because it is inexpensive compared to a foreclosure.
A short sale is not an available option if you have positive equity in the house. Positive equity means your investment in the home exceeds the outstanding mortgage. Although you can pursue a short sale, many applications are accepted only if you have an underwater house. If a short sale is not an available option, your next choice is to sell the house before the auction date.
Understand the Foreclosure Timeline in Connecticut
Connecticut is a judicial foreclosure state that means the court monitors the process. However, Connecticut is different because we have two different methods available in the judicial foreclosure category:
- A strict foreclosure
- A decree of sale
During a strict foreclosure, the bank won’t hold an auction to sell the house. This typically takes less time. The lender will go straight to the court, asking for the title of the house. In Connecticut, the court can award the title to the bank if you have failed to pay back the loan. However, the court can give you time to redeem the property. Once the timeline expires, the bank will hold the title, and you won’t own the house anymore.
During a decree of sale, the bank will sell the house. The bank will appraise the house and will schedule a time to sell the house. Until the date of the auction, you have the time to pay back your mortgage or sell the house to pay back the lender. However, there is no right to redeem the house. Once the home is sold, you cannot get it back.
In Connecticut, a bank can pursue a deficiency judgment after foreclosing the house. A deficiency judgment is a possibility after a successful short sale negotiation.
If you are in the pre-foreclosure phase or need help saving your home, please consult a real estate solutions company in Connecticut. When the going gets tough, a reputable advisor can guide you in the right direction and help you decide what’s best for you.