What is a Pre-Foreclosure in Chicago?

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With the economy changing, the number of homes across the country going into foreclosure is spiking. It’s important to understand the process beginning-to-end.

So what is a pre-foreclosure in Chicago anyway?

Inflation is at a forty-year high. Savings are low. Many homeowners across America and Chicago are facing difficulties making their monthly mortgage payments.

When a homeowner misses 3-6 months of mortgage payments, the bank or lender will issue a warning, which serves as a notice to the homeowner to pay or lose their home. This period is known as “pre-foreclosure.”

Banks and mortgage lenders typically provide three months for the homeowner to become current.  It can vary, but that’s the average.

If a homeowner fails to catch up and make the necessary payments, the bank will foreclose on the home, assuming ownership, and evict the homeowner.

Thankfully, during this stage of the pre-foreclosure process, a homeowner has the opportunity to take advantage of several options to prevent losing their home.

Pre-foreclosure Options for Borrowers

If you’re behind on mortgage payments, you’re likely to receive a dreaded “notice of default” from your mortgage lender.

This document will state that you have not made mortgage payments for the last 90-180 days. Don’t panic.

You have several options that can delay or even prevent losing your home:

  • If your mortgage is what we call “above water,” (meaning you have equity in your house from a down payment or series of on-time payments over the years) you may be able to refinance your mortgage, receiving lower monthly payments.  Check with your local Chicago mortgage broker… or contact us and we can connect you with a reputable one.
  • You may be able to quickly sell your home to a real estate investor that’s reputable in Chicago like us at Olson Home Buyers. You can use the cash acquired to pay the months of back-payments owed (or we *may* be able to work out something with the lender that relieves all or part of your back payments and helps you recover your credit). We can buy your Chicago area home quickly, often in just a week or two, will pay in cash, and takes the stress out of trying to find a buyer.
  • You can contact the bank and ask them to permit a short sale. In a short sale, you’ll sell your home for less than it’s worth, and the bank will take the loss as a tax write-off.  In some short sales you may still be required to pay the difference to the bank if the house doesn’t sell for what is owed on the loan.
  • You may be able to declare bankruptcy, which can buy you time to pay your debt. But beware: Bankruptcy will remain on your credit report for years, and can cause significant damage. You are likely to not be able to buy another home for many years. Foreclosure can even make it difficult to find rentals. 

Still, lenders are very much aware of the widespread financial troubles across the country and they’re willing to work with borrowers much of the time.

If you’re honest and communicate with your lender, you’ll often find that there are options that will allow you to remain in your home, or at least salvage your credit rating.

A foreclosure can often negatively affect your credit score by 200-400 points ore more and can prevent you from obtaining a loan of any sort for 5-7 years, so be very proactive if you’ve received a Notice of Default.

We want to help. If you’re not able to find a solution with your lender working directly with them… connect with us. 

Ways We Can Help If You’re In Pre-Foreclosure

  • We can potentially help with a short sale – Submit your info on this website so we can evaluate your situation to see if we can help.
  • We can buy your Chicago area houseWe buy houses in Chicago and would love to make you an all-cash offer on your house too. Just fill out the form here to get started >>
  • You can ask us questions and we can provide you FREE guidance and resources so you can make a well informed decision. This costs you nothing, there’s absolutely no pressure and no obligation… just free guidance without a catch.

If you’re in the pre-foreclosure stage… you still have time to fix this situation.

Want To Discuss Your Pre-Foreclosure Options? Call Us at (312) 210-0115
Or, Submit Your Info Here To Get A Cash Offer On Your House >>

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