Foreclosure happens when homeowners fall behind on mortgage payments and have no means to catch up on their debt. Since a mortgage represents a binding legal contract between you and your lender, defaulting on the loan gives the lender the right to auction your property to recover their investment, potentially leaving you without a home and with severely damaged credit.
Nobody wants to face foreclosure, yet according to a nationwide study, approximately 1 million Americans feared losing their homes (U.S. Census Bureau Household Pulse Survey, fielded from July 27 to Aug. 8, 2022). Foreclosure can result from various circumstances, 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
RVA Home Buyers is a trusted local buyer operating throughout Virginia that has established their reputation by purchasing distressed properties and homes directly for cash. They deliver competitive cash offers without the complications of real estate agents, title companies, traditional bank financing, and other common hurdles! They have over 25 years of experience in the local Richmond, VA market and are uniquely qualified to help homeowners that find themselves in this unfortunates situation.
What is Foreclosure?
Imagine suddenly losing your job or your spouse becoming unemployed. Your financial obligations remain unchanged, but your income has drastically decreased, making it impossible to cover essential expenses—including your mortgage payment. What happens next? Even if you secure new employment quickly, the debt accumulated during this period might be overwhelming and impossible to manage within a reasonable timeframe. When homeowners fall too far behind, lenders typically initiate the foreclosure process. Often, the lender office that is handling the foreclosure is not near the actual property and are not familiar with the owners and their specific situations or circumstances. It is also generally difficult to find the right person who can actually help or assisting with “fixing” the issues.
How Long Do You Have To Get Out of Your House After Foreclosure?
Foreclosure typically follows five key stages: missed payments, public notice, formal foreclosure, auction, and eviction – though timing varies significantly by state. Depending on your location, you might have between 120 days to nine months before the bank can complete foreclosure through either judicial or non-judicial processes. Throughout this period, expect your lender to contact you via phone, mail, and email to communicate about your options and the foreclosure timeline. While they prefer to help stop the foreclosure, they do not have many creative options that help without the homeowners having to come up with large amounts of cash on short notice. They are lenders and not real estate professionals.
The Different Types of Foreclosure
There are two different types of foreclosure you may experience: nonjudicial foreclosure or judicial foreclosure.
What Is Non-Judicial Foreclosure?
In Virginia, a non-judicial foreclosure allows lenders to repossess your property without going through the court system. This streamlined process, which is typically the fastest and most cost-effective option for lenders, operates under the “power-of-sale” clause found in your deed of trust. When lenders choose this route, they can foreclose and sell your home to recover the outstanding debt according to state regulations, all without legal proceedings. While not available in every state, lenders will generally select this option in Virginia to avoid court expenses and accelerate the foreclosure timeline.
What Is Judicial Foreclosure?
When facing judicial foreclosure in certain states, your lender must initiate legal proceedings by filing a lawsuit requesting court permission to sell your home. The lender is required to serve you with this formal notice. Regardless of your position on the matter, you must respond to this notice – failing to do so results in the lender automatically winning the case and gaining authorization to place your property in foreclosure. Following the sale of your home, you remain liable for any shortfall between your remaining mortgage balance and the final sale price.
Foreclosure auctions operate differently than traditional real estate transactions, with properties typically selling below market value. This means even if your home is well-maintained and worth significantly more than your outstanding mortgage, you could still end up owing substantial amounts – potentially tens or hundreds of thousands of dollars – for a property you’ve lost ownership of. This financial obligation is known as a deficiency judgment. Due to the costly and time-consuming nature of this debt recovery process, most lenders prefer pursuing non-judicial foreclosure options when available.
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How to Sell Your House Before Foreclosure in Virginia
Let’s break down a few ways you can sell your house, depending on your time frame and situation:
Hire A Real Estate Agent
When facing foreclosure, most homeowners automatically consider listing with a real estate agent. While this traditional route has its benefits, it comes with significant drawbacks for those in financial distress. A realtor can certainly market your property on the MLS and prepare it for showings, but their services come at a steep price – typically 3% to 6% of your sale proceeds goes directly to agent commissions. If you’re drowning in debt and desperately need every dollar to satisfy your lender, surrendering such a substantial portion of your equity may simply not be feasible in your current situation.
Even more concerning is the uncertainty around closing timelines. While realtors may make ambitious promises, the reality involves finding a qualified buyer and then enduring a traditional closing process that typically takes 30 days or longer. For homeowners staring down an imminent auction date or eviction notice, this timeline can be far too lengthy – even a month’s delay might be the difference between resolving your situation or losing everything.
Short Sale
Facing a situation where you owe more on your house than it’s worth? This is known as being “underwater” and may require a short sale. A short sale becomes necessary when your mortgage balance exceeds your property’s current market value. For instance: if your mortgage is $200,000 but your home’s market value has dropped to $150,000, you’re looking at a short sale scenario. While it might appear to be a reasonable solution at first glance, the process is neither quick nor straightforward.
The short sale journey begins with obtaining your lender’s permission. To qualify, you’ll need to demonstrate genuine financial hardship through documentation like W-2s or medical bills. If you’re citing income loss, your lender will require evidence that this financial setback is permanent with little chance of improvement. Even after lender approval, you’ll need to hire both a real estate agent and attorney who specialize in short sales—professionals who will charge their standard fees just as they would in a traditional home sale.
If your foreclosure process hasn’t advanced too far and you’ve maintained communication with your lender, they’ll likely approve the short sale. This arrangement helps them avoid the costly and time-consuming foreclosure process while recovering some portion of their loss from your missed payments. However, for the average homeowner, the consequences of a short sale will linger for 5 to 7 years afterward.
Though you may have sold your property and settled some debt, a short sale damages your credit score nearly as severely as bankruptcy. Credit bureaus record both the mortgage payment delinquencies and the short sale itself, creating significant obstacles for former homeowners. This negative impact makes it extremely difficult to qualify for credit cards, auto loans, or secure new housing for approximately the same duration as a bankruptcy would.
Sell Your House AS-IS to A Cash Buyer
Facing foreclosure with the auction and eviction looming? You still have viable options! While listing with a real estate agent or negotiating a short sale with your lender are possibilities, partnering with a reputable cash investor often provides the most efficient solution to your pressing situation.
When you choose to work with a direct cash investor, you’ll enjoy these key advantages:
- A quick and pain-free closing process.
- Avoid paying any commissions or fees.
- You won’t have to worry about marketing your house and waiting 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 not only can avoid losing your home to an auction, but you also may be able to sell the property for enough money to get out of financial debt. Moving on with your life without the burden of a monthly mortgage payment and debt hanging over your head is one of the best gifts you can give yourself!
Can You Stop Foreclosure Once it Starts?
Pay Off Your Loan & Fees
Facing mounting debt while your income stays stagnant can feel overwhelming. Now’s the time to take decisive action to reduce your financial burden quickly. Consider what assets you might be able to sell for immediate cash flow. Perhaps there are supportive friends or family members who could offer financial assistance or a temporary loan to help you regain stability. If you’re committed to eliminating debt and preventing foreclosure, consulting with a financial advisor might provide valuable guidance for restructuring your budget effectively. You may find that combining several strategies creates the most powerful approach to conquering your debt mountain and returning to a life with significantly less financial stress.
Declare Bankruptcy
When facing foreclosure, bankruptcy might seem like a lifeline, but it should be considered a last resort due to its significant consequences. This complex legal process requires specialized bankruptcy attorneys and, if approved, mandates participation in government-supervised credit counseling. Be aware that bankruptcy remains on your credit report for 7 years, potentially affecting your ability to secure auto loans, credit cards, bank accounts, and even rental housing. Before taking this step, explore all other foreclosure prevention options that could help preserve both your home and financial future.
The Homeowner Affordability and Stability Plan (HASP)
Struggling with debt that exceeds your income? You might qualify for the Homeowner Affordability & Stability Plan (HASP). This specialized loan modification program is designed specifically for homeowners facing foreclosure risk due to income limitations. HASP helps American homeowners restructure their monthly mortgage payments to better align with their financial situation, making homeownership sustainable even on a restricted budget. Discover if this government assistance program could be your solution by applying here today.
Related Articles
5 Ways the Foreclosure of Your Virginia House Will Impact You in the Future
What Homeowners in Virginia Can Expect During the Foreclosure Process
The Difference Between Pre-Foreclosure and Foreclosure for Homeowners in Virginia
How to Sell Your House During Bankruptcy in Virginia
Stopping the Foreclosure Process: A Guide for Virginia Homeowners
What Rising Foreclosure Rates Mean for Home Buyers and Sellers in Virginia
Avoiding Foreclosure: How Virginia Direct Property Buyers Can Help You Keep Your Credit Score Intact
How to Sell Your House in Virginia if You Owe More Than It’s Worth
4 Things to do if You Are Upside-Down on Your Mortgage in Virginia
Traditional Sales vs. Short Sales And Foreclosures in Virginia
Sell Your House Fast to a Cash Buyer
Struggling to sell your house quickly without waiting 30+ days for a traditional closing? Worried a short sale might damage your credit? Need to pay off mounting debt and get lenders off your back immediately? A direct cash home buyer might be the solution you’ve been looking for! When partnering with a reputable local investor with a proven track record, you’ll find a responsive team with ready capital prepared to purchase your home exactly as-is. With the right cash buyer, you can bypass the lengthy foreclosure process, avoid eviction, and prevent auction—all within days, while protecting your credit score!
While selling to a trusted cash investor might not yield full market value, the benefits often outweigh this difference at closing—rapid timeline, zero fees, no required inspections, and no commissions. Most importantly, because cash investors can close quickly, you can often finalize the sale before your property reaches auction! This means securing a price that benefits you rather than accepting the minimal value banks typically offer when trying to clear properties 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 RVA Home Buyers to find out more and get a fair cash offer for your property today.