In this post I’m going to cover strategies that may help get a foreclosure postponed.
I talk to students all around the country, and one of the main questions I get is “How can I postpone a foreclosure?”. I’m going to give you a tried and true method for postponing foreclosure in this post, whether this is a property going through the short sale process, or not. If you’re a homeowner reading this (yes, homeowners find this site all the time), there should be some good info in here for you as well. We’ve stopped foreclosure sales with only one or two days left before the foreclosure auction!
How to Postpone Foreclosure During a Short Sale:
Most that read this blog are investors or real estate agents, and many of the properties you deal with right now are upside down, so you’re dealing with a short sale. The best way to get a foreclosure stopped or postponed is… Submit a COMPLETE short sale package! Yep, it can be that simple. Postponing foreclosure really isn’t that hard. There’s a little more to it, but this is the start.
When I say complete short sale package, I mean you MUST include everything required for the lender to take you seriously:
1. Last mortgage statement
2. Last 2 months pay statements
3. Last 2 years tax returns
4. Hardship letter
5. Purchase agreement
6. HUD-1
7. Financial statement (note: you may need to use the one provide by their lender)
8. Anything additional required by the lender for the short sale
Here’s the process: Get an authorization to release information from the homeowner and send that to the lender. Follow up and ask the lender what they require for the short sale package (their forms, any specific requirements, etc.). Find out where to fax/email the short sale package. SEND the package and FOLLOW UP! Keep following up until you talk with someone that can make decisions (loss mitigator) about the sale, and they also have access to the person that can give them permission to postpone the foreclosure sale.
Be aggressive and diligent when doing this (just not rude). If the foreclosure sale date is close and you’re serious about postponing foreclosure, you must be on top of this. You’ll find that most lenders are unorganized, and it will be YOU that needs to navigate the path to get this done.
The keys here are to be complete, efficient, and diligent. Follow up as often as you need to so you can get this accomplished. If the lender postpones the foreclosure, it will likely be for 30 days or more, which will give you time that you need.
Postponing Foreclosure Without a Short Sale:
This can be very easy to do, provided you speak to the right person at the lender. Usually the loss mitigator for that specific account.
Postponing foreclosure with a sale of the property that will cover full payoff of the loan and any back payments and fees is very attractive to the lender, you just need to be able to let someone that matters know your intent. I’ve seen many times where this was attempted, yet the decision maker at the lender never knew, so the house went to foreclosure! Sad.
Here’s the process for postponing foreclosure, it’s similar, yet easier than above:
Contact the lender and get an authorization to release info to the right department. Follow up and once you can speak with them, let them know that you have an offer that will completely payoff all debt to the lender. Be SURE to tell them this is NOT a short sale. Once you have your contact, you will send:
1. Purchase agreement
2. HUD-1
3. Listing agreement if applicable
That’s it! Then your job is to FOLLOW UP until you know the right person has this info. They should stop the foreclosure sale very quickly now. Postponing foreclosure is certainly their best bet.
A few side notes:
You must be sure to follow up, while not being rude or pushy. It’s a delicate balance.
Some states/areas require that you be licensed in order to talk to a homeowner’s lender about a short sale or postponing foreclosure – know your area’s laws.
Always be careful of getting in a position where you can be considered “at fault” for not getting the homeowner’s foreclosure stopped.
To summarize, postponing foreclosure CAN be done quickly, if you know the steps.
I hope this helps. Please leave any comments you may have or your own tips on postponing foreclosure below.
David Corbaley
