If you stop paying your monthly mortgage payments, your house will eventually go into foreclosure. That means the lender of your home loan has the right to take your property, kick you out, and sell your home to recoup the losses.
House foreclosure in Boise, Idaho, or anywhere is a painful process. It can even involve a visit from the local sheriff to physically evict you from your house, whether you have packed your bags and belongings or not. In addition to losing your property, you will lose all the money you’ve invested in the home and get a negative mark on your credit report that will last for years. Fortunately, there are a few ways to avoid foreclosure in Idaho, like asking the lender for a loan modification or selling your home.
House Foreclosure In Boise Idaho
How Does House Foreclosure Work?
Foreclosure happens when you have become delinquent on your mortgage payments. You are considered late after you miss the first mortgage payment, but usually have time to catch up. However, if you continue to neglect to pay the unpaid loan debt and the upcoming monthly payments, you will be considered in default. Borrowers tend to receive notices throughout this period, letting you know that you could be facing foreclosure. Though you may be notified after 30 days, or you may receive a notification along with your first missed payment. In most Idaho cases, the law prohibits the server from beginning foreclosure until the borrower is over 120 days delinquent on the loan.
In the state of Idaho, foreclosures are typically handled non judicially. In the nonjudicial foreclosure process, the mortgage lender doesn’t need to file a foreclosure with the court. Foreclosure is also called statutory foreclosure or power of sale. A nonjudicial foreclosure proceeding happens faster since the courts aren’t involved. When you go through a nonjudicial foreclosure proceeding, the lender will specify and include how the foreclosure would work in your loan agreement.
As far as the process of foreclosure, it is very similar to other states. The mortgage lender will file a foreclosure document at the county records office and usually send a copy to you. The document is known as a notice of default, a notice of sale, or lis pendens.
They also have to publish the notice of sale in a newspaper, once a week for a month. A public foreclosure notice like a sign outside your home may also be required. After the notice of default is documented, the lender also has to send you a notice of sale 120 days before the sale.
Under Idaho law, you have the legal right to prevent foreclosure by reinstating your loan up to 115 days after the recorded date of the notice of default. To reinstate your loan, you will need to pay all missed payments, fees, and costs in one lump sum.
Unlike other states, Idaho law doesn’t provide a post-sale redemption period after a nonjudicial foreclosure. A redemption period is where a foreclosed homeowner can “redeem” (buy back) the home after the foreclosure sale.
So once the property is sold, the proceeds will be used to pay the mortgage company or bank and pay off any other lienholders. Besides paying principal and loan interests, mortgage payments also include insurance and property taxes that will need to be paid as well. So if you haven’t been making your mortgage payments, you may have a tax lien on your property.
Did you know that the IRS can foreclose on your home too (tax foreclosure)?
How Foreclosure Can Affect You
Home foreclosure has several consequences. There is a possibility you may be evicted or forced out of your home, which can be a very emotional experience, especially if children are involved.
Missing mortgage payments can lower your credit score and stay on your credit report for up to seven years, making it very difficult to take out a new mortgage, credit card, or a car loan.
How To Avoid House Foreclosure In Idaho
Firstly if you think you’re going to miss a mortgage payment, give your loan servicer a call as soon as possible. They will guide you in the right direction, and some may even ask you to attend foreclosure prevention counseling. Remember that your lender doesn’t want to seize your house, as it can cost them time and money- they would like you to keep the home and make your monthly mortgage payments. Besides calling your lender, there are a few other ways to avoid house foreclosure in Boise, Idaho.
Ask for a Loan Modification
A loan modification changes your loan agreement’s terms, whether it is the interest rate, the principle, or the loan term. Loan modifications are typically offered to people suffering financial hardships because of significant life changes, like losing a spouse’s income stream or getting laid off from a job.
Loan modification would make your payments more affordable, but you may owe more money over a more extended period.
Forbearance means that you would stop making payments for an agreed-upon time. If your mortgage lender lets you choose forbearance instead of foreclosure, you will have extra time to get your cash together to make both delinquent house payments and current payments. The only downside is if the loan servicer doesn’t think you will be able to make current payments after the forbearance period, they may not allow it.
Get a Deed In Lieu of Foreclosure
The borrower relinquishes ownership over their home by giving the lender the deed of trust in exchange for mortgage relief. Keep in mind; you may have to make some payments toward the remaining balance.
A deed in lieu of foreclosure is still a foreclosure but without most of the foreclosure’s negative consequences. You would get to leave the home on your terms (usually without a sheriff evicting you) and your credit won’t be affected as severely.
Offer a Short Sale
A short sale is an option where the property owner voluntarily sells their property, usually below market price. The lender accepts the sale profits, which are generally short of the actual loan balance, and may forgive the remaining mortgage debt. But short sales tend to be a complicated process, and if you need to sell quickly, very few short sales are completed in 30 days. The misconception is that lenders want to be rid of the property and will move quickly to get as much money as possible. In reality, the lender will take their time to recover as much of their loss as possible. Even if you accept an offer doesn’t mean the lender will accept the offer too. And if you go this route, you will either need to hire a real estate agent or sell by owner. Both will take time and money to sell your property.
File Chapter 13 Bankruptcy
Bankruptcy is one of the more severe options to avoid foreclosure, but it will help you stay in your home. If an Idaho court allows you to declare bankruptcy, they may put you on a repayment plan that grants you to make payments towards the delinquent amount as long as you continue making your current mortgage payments.
In most situations, you would need to declare Chapter 13 bankruptcy if you want to keep your home. Declaring Chapter 7 bankruptcy doesn’t involve creating a repayment plan and may mean selling your house anyway.
Bankruptcy is a more severe option because bankruptcy may erase or pay off past debts, but those accounts won’t disappear from your credit history. All bankruptcy-related accounts will remain on your credit history and affect your credit score for 7 to 10 years. So, keep in mind that filing for bankruptcy can make it difficult for you to take out a mortgage in the future.
Sell your House to a Home Buyer
All the ways mentioned above to avoid house foreclosure in Boise, Idaho still obligates you to pay a mortgage you already are struggling to pay, pay extra towards what you owe, or lose your house and damage your credit for years to come. The best step for you in this situation is to sell your home before the foreclosure process starts. That way, you can be in control of the situation.
Selling a house can be stressful though, and require time and money to get your home ready to sell, but there is another way. Instead of listing your house and waiting weeks to sell, you could sell your house to a cash home buyer. Selling a property to avoid foreclosure is possible, but you will need to move quickly. And that is why working with a cash home buyer would be ideal for this particular situation.
Cash home buyers purchase houses in as-is condition, so you wouldn’t need to do any repairs or renovations, saving you a lot of time and money. Furthermore, there are no realtor commissions or fees; they can even pay closing costs. And because they pay in cash, they can close on your house in as little as 7 days. Finding a reputable home buyer to help you before your house goes into foreclosure may take some time, and time is not on your side in this type of situation. So in an effort to help, meet Gem State Cash Offer.
Gem State Cash Offer is a BBB accredited home buying company in the Boise, Idaho area that can quickly buy your house. So if you are trying to avoid house foreclosure in Boise, Idaho, give Gem State Cash Offer a call.
We pay cash for houses in any condition and can close on your schedule. We have the resources and experience to buy your Boise house today. So if you are serious about selling your home fast and avoiding house foreclosure in Boise, Idaho, get a fair cash offer today!