Rich Von has spent the last decade working to rehabilitate properties that have fallen into foreclosure. While he has seen the heartbreak foreclosure can bring a family, Rich Von has also benefited from seeing families realize their dreams of home ownership due to the low price of these properties. In the current economic environment, Rich Von believes it’s more important than ever for people to understand the things they can do to avoid losing their homes.
Q: I can’t afford my house payment. How do I know if I’m in danger of foreclosure?
Rich Von: Occasionally falling behind on your mortgage payments won’t result in the loss of your house. It may damage your credit, but if you’re on time most of the time and always eventually pay, you should keep your house.
Q: What if I lose my job and have no way to pay?
Rich Von: The first thing to do if you lose your job is contact your mortgage company and explain the situation. They may be willing to work with you.
Q: Won’t the lender foreclose if they know I have no way to pay?
Rich Von: Remember, the lender does not want to foreclose. If there’s a way for you to pay eventually and you’ve just temporarily fallen down on your luck, they’ll work with you.
Q: If a bank forecloses, will I be free of debt?
Rich Von: The bank will sell your property, usually at a drastically reduced rate. If the rate it recoups on the sale is less than what you owe, you’ll be responsible for the difference. That’s one of the reason many homeowners elect to work with the bank and instead of going thru foreclosure, to instead go thru a short sale. With a short sale, the bank doesn’t have to go thru the legal steps of foreclosing, which saves them time and money; and the homeowner is often forgiven the shortfall (the difference between the home’s sales price and the mortgage balance).
Q: What if I file bankruptcy?
Rich Von: Bankruptcy will not necessarily relieve a person of his or her debt to the lender. It depends on the state in which the homeowner lives and the type of bankruptcy filed.
Q: Is there a way to avoid foreclosure?
Rich Von: There are several alternatives to foreclosure if a person can’t afford the debt. First, I’d recommend working with your bank to see if there are any programs for which you qualify. Refinancing might also be an option, since it will lower your monthly payment.
Q: What is a deed in lieu of foreclosure?
Rich Von: When a homeowner takes this route, the lender takes back ownership of the property, with the equity hopefully paying off any remaining debt.
Q: Can I sell the property at a loss?
Rich Von: Yes, and this is often the best alternative. However, be aware that you’ll still owe the difference once the lender has taken its share unless you’ve come to an agreement with the bank beforehand that they won’t chase you for the shortfall.
Q: If I have a foreclosure, will I be unable to buy a home again?
Rich Von: Not at all. But there are usually waiting periods in which you can’t buy another home, depending on the type of loan you try to obtain.
Q: What are those waiting periods?
Rich Von: It varies, but often you won’t be able to buy a home for three years. That’s standard.
Rich Von graduated from Santa Barbara College, before beginning a degree in marine biology. After working in sales and marketing, Rich Von took on business ownership, gaining experience in the real estate industry before founding Von Vesting, Inc..