Think Hawaii house foreclosures aren’t something you ever need to worry about?
Think again.
Foreclosures are much more common than most people expect, as roughly one in every 200 homes will face the foreclosure process.
Whether you’re struggling to make the mortgage payments on your Oahu home, if you’ve already entered into pre-foreclosure, or if you just want to learn more about how property foreclosures work, understanding the process — and what you can do to stop it — is invaluable.
In this post, we’ll break down the basics of house foreclosures in Oahu and the surrounding areas. We’ll help you understand the different foreclosure types, the phases of foreclosure, and how you can save your home and/or your financial standing.
Read on to get informed, weigh your options, and stop the threat of foreclosure from keeping you up at night.
What Is a Foreclosure?
First, let’s talk about what house foreclosures are and ensure that you understand the different phases and types of foreclosures.
In the simplest terms, property foreclosures happen because a homeowner is no longer able to make their mortgage payments on time or in the required amount.
This means that the mortgage lender has the right to seize ownership of the home since the homeowner has violated the original terms of the lending agreement.
There are lots of different reasons why people default on their mortgage payments and put themselves at risk for foreclosure.
They may have been unexpectedly fired from their job or have other bills and debt they cannot pay down. They may be going through a divorce, or the home itself has such high maintenance and repair costs that the homeowner can no longer afford to make their payments.
In extreme cases, homeowners stop making mortgage payments intentionally. This often happens because market value fluctuations and other external factors have made the home loan much more expensive than the value of the home itself.
The Types of Foreclosure
Homeowners may be faced with either a judicial or non-judicial foreclosure.
In a judicial foreclosure, the mortgage lender files a lawsuit against the borrower for a failure to repay the loan. The case enters into the public record, and if the homeowner doesn’t respond in 20 days, the house is sold at an auction.
A non-judicial foreclosure means that, once the borrower is in default, the mortgage lender has the power to sell your property. You do have a set amount of time to pay your past-due bills.
If you can’t make the payments, the mortgage lender can either auction off the home or list it for sale in the MLS.
Foreclosures can destroy your credit rating, cause great personal stress and embarrassment, and can make it much more difficult for you to get approved for any type of loan in the future. This is the case with both types of foreclosure.
The Stages of House Foreclosures in Oahu, Hawaii
Now, let’s take a quick look at the different phases of foreclosure in Oahu.
First, you’ll enter into the pre-foreclosure process. This doesn’t happen immediately after you fail to make a singular payment, but rather after 3-5 months of continued negligence.
The pre-foreclosure process is a kind of “official warning” from your lender that your home will go into foreclosure if you’re unable to make the missed payments.
The pre-foreclosure period is when you have the most options to save your home, so never make the common mistake of “ignoring” the calls, bills, and notices. They’re not going to go away, and you still have the opportunity to negotiate with your lender and attempt to find a repayment solution.
Remember that Hawaii doesn’t allow homeowners the right to redeem (essentially, repurchase) their own property back once it’s been foreclosed upon. So, if you want to save your home, you need to act immediately.
The typical pre-foreclosure period lasts for anywhere between 20 and 90 days. If you pay off your mortgage loan/missed payments within this time period, you can keep your home. If not, it is sold at auction or listed on the MLS.
Then, your home will be sold, and you’ll enter into the final phase, the post-foreclosure process. At this point, if your home didn’t sell at auction, it becomes the property of the mortgage lender and will be sold on the market.
We know you don’t want to lose your home.
Let’s talk about what you can do.
Stopping Foreclosure
While in the past year, the home foreclosure rate in the United States has been lower than it has in over a decade, some homeowners simply can’t afford to make their current payments.
We’ve mentioned the possibility of contacting your mortgage lender directly and attempting to renegotiate the terms of your loan so you can afford to keep your property and pay the lender a more affordable rate until your finances are back in good working order again.
Now, let’s discuss your other options.
1. Sell Your House for Cash
The best way for you to avoid foreclosure in Oahu is to work with a cash home buyer.
Selling your house to a cash buyer ensures a fast sale where you will at least get SOMETHING (even if it’s slightly less than market value), rather than losing it all in foreclosure. If you can’t afford your payments and just want to get rid of your home, then selling it to a cash buyer is the right move.
You’ll get a fast, fair offer based on current market values, your home itself, and the location of your property. These buyers will take your home as-is, so there’s no need for you to spend your cash on renovations and costly repairs.
In the state of Hawaii, a foreclosure stays on your credit report for 7 years. You don’t want a foreclosure to haunt you and impact your life for that long.
It’s always best to sell the property and move on.
2. Look Into Federal Assistance Programs
Because home and land foreclosures are so common in the United States, the government does offer a few different assistance programs that allow people to end the foreclosure process and keep their homes.
You may want to look into the Making Home Affordable (MHA) program, as they can help you to learn more about the mortgage assistance options available to you.
Solutions like HAMP can help to keep your mortgage payments low — often securing a repayment amount that’s up to 40% less than what you were originally paying.
Here, we do want to remind you to work only with registered government agency loan modification programs. Unfortunately, there are tons of predatory scammers out there that will claim to be able to “magically fix” your financial problems. Often, you end up accidentally signing your home over to these criminals without even being aware of it.
Remember that no one should charge you for advice and that you should always talk to a lawyer to make sure everything is in order before you sign any paperwork. In the end, go with your gut. If something sounds too good to be true, it is.
3. File for Chapter 13 Bankruptcy
The last option on your list should be filing for Chapter 13 Bankruptcy.
This allows you to readjust your debt as long as you can prove you have a steady income, and will allow you to keep your property.
Usually, you’ll have anywhere from 3-5 years to repay your debt in full, but remember that you’ll have to pay both current and past mortgage payments during this period.
Understand that filing for bankruptcy essentially destroys your credit, so we suggest this only as a last resort.
We Can Help to Stop House Foreclosures
Are you currently facing the prospect of foreclosure on your Oahu, Hawaii home?
If so, then we want to be your best line of defense. We have years of experience in helping homeowners to avoid house foreclosures, and we’re committed to giving you the fairest possible price for your property — as quickly as we can.
In most cases, we’re able to buy your property within just 7 days after you begin working with us. We also don’t charge any real estate agent fees or commissions, and we even take care of the closing costs for you, as you already have enough to worry about.
It doesn’t matter what kind of condition your home is in, how old it is, or what financial struggle you’re currently going through. We will help you to avoid foreclosure.
Read up on how our process works today and begin by filling out the form below to get an all-cash offer in no time. Remember that there is no obligation to sell attached to your offer.
Together, we’ll help you make it through this difficult time.