9 Steps on how to avoid a real estate foreclosure on a Kansas home - Kansas City real estate

9 Steps on how to avoid a real estate foreclosure on a Kansas home - Kansas City real estate 

You have received a notice of foreclosure on your home in Johnson County, Kansas.

Saving your home may seem hopeless, but the last thing you should do is give up. Many people encounter life-altering events that interfere with their ability to pay their debts. Usually the last payment to be late is the mortgage, but it happens. Too many late mortgage payments mean a possible foreclosure.

If only the mortgage company would take partial payments.

First and foremost, although you may think the mortgage lender wants to foreclose, they do not want to foreclose on your Johnson County home. They are not in the real estate business and are willing to work with homeowners. If you have not been able to reach a solution with your mortgage lender or you have ignored the lender’s letters and phone calls, then foreclosure is their only option.

In the state of Kansas, there is only one type of foreclosure a judicial foreclosure. Missouri uses a non-judicial foreclosure process. A judicial foreclosure is granted by a court to a lawsuit brought by the mortgage lender against the homeowner, and is necessary when a “power to sale” clause was not included in the mortgage contract. Since commercial lenders usually include the clause, which grants them the right of non-judicial foreclosure, the mortgage contract you signed automatically gives them the power to seize your real estate in order to recoup their losses. After the foreclosure, a Kansas homeowner has typically 90 days to redeem their home.

With the non-judicial foreclosure, like in Missouri, a homeowner usually will have a small window of time to redeem their home before it is sold.

With a judicial foreclosure, a home is auctioned off immediately to the highest bidder.

Under the judicial foreclosure, the mortgage lender may seek a deficiency judgment to recoup some of their losses on the seizure and sale of the home. Under most circumstances, a Kansas homeowner has 90 days to redeem their home. This means the homeowner can even sell their home.

So, a Johnson County homeowners best bet is to do something before their home is seized and sold on the Johnson County courthouse steps. Here are some ideas of what to do:

1. A Johnson County homeowner should speak to a HUD-approved counselor, especially they have not kept in contact with their lender. A counselor can help determine what options may be available. In some cases they can help negotiate a repayment plan or another solution with the mortgage lender. To find a counseling agency in your area, call HUD at 1-800-569-4287.

2. A Johnson County homeowner should request a reinstatement of their mortgage loan if they can promise to pay a lump sum or bring the mortgage current by a specific date. Some homeowners use a gift, 401K, settlement or a tax refund to help them bring their mortgage current.

3. A Johnson County homeowner should request a loan forbearance. A loan forbearance allows a homeowner to delay payments on their mortgage loan for a short period. The mortgage loan must be brought current again by a specific date. A reinstatement generally is used in combination with loan forbearance.

4. A Johnson County homeowner should request a repayment plan. This option is used for homeowners who lack a lump sump payment but now can get their mortgage payments back on course. Typically a homeowner who has been through a hospital stay or a temporary job loss take this option. Usually the mortgage lender adds a portion of the past due payments to a specified number of payments in order for the homeowner to catch up.

5. Rather than a repayment plan, a Johnson County homeowner may qualify for mortgage modification through their mortgage lender. There are two possibilities here — (1) add the past due amount to the existing real estate loan and finance it over a long term, or (2) if the mortgage payments need to be reduced, the mortgage lender may extend the length of the mortgage loan in addition to adding the past due amount.

6. If the above options have not worked out, a Johnson County homeowner should request a Short Sale with their mortgage lender. Many times a mortgage lender will postpone the foreclosure if the short sale has been requested and approved through the mortgage lender. Although most homeowners will try this option last, it is important that the short sale is started at the beginning. Most short sales are unsuccessful because of the lack of time. If another option works out, the short sale can be stopped. A qualified short sale professional will need to be hired that understands the short sale software, Equator. Need help or recommendation, we can help. Oh, did I mention that the bank will pay the fees and commissions.

7. If it is getting to close to the foreclosure, a Johnson County homeowner may negotiate a Cash for Keys or Deed-in-lieu of foreclosure option with the mortgage lender. Although this may forgive the debt, there will still be a negative rating on the credit report. Sometimes many lenders view these options on a credit report as though they are a foreclosure.

8. A Johnson County homeowner who is a veterans and/or a military personnel may have some extra alternatives. First, they should contact their VA loan representative for counseling. Active duty personnel may be able to stop foreclosure under the Soldiers and Sailors Civil Relief Act, and may be eligible for a reduction in their interest rate. Additionally, veterans may be eligible for “workout” programs (options to resolve the foreclosure) under FHA, VA and some conventional real estate loans.

9. If nothing has worked out to this point, a Johnson County homeowner may hire an attorney to handle a bankruptcy for them. A bankruptcy will only stop the foreclosure for a short period only. It may also give some leverage in resolving a solution to the foreclosure problem.

Whatever plan you consider to stop the foreclosure of your Johnson County home, a homeowner must put a plan into action. First make a list of people to contact to help you, then contact them. They will need documents completed. It is important to complete the documents in a timely manner. Do not take a “wait and see” attitude. That means, a short sale request maybe being worked on while another option is in process. Also, put everything in writing and document everyone all people spoken to about avoiding foreclosure. 

Follow-up phone conversations with lenders, consultants and counselors with a letter or email reiterating the important points.


Finally, follow through, most people will not get a third chance.

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Blog post written by the Dowell Taggart Team of RE/MAX Premier Realty 

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