Want To Learn More About Foreclosure Now?
We have created a free online guide to help homeowners just like you find out your options. Click on our resources page, complete the form and download your free copy of 5 Ways To Stop or Avoid Foreclosure.
You are not the first person to go through such a situation… and will not be the last. So, do not feel ashamed. It happens.
The best thing you can do right now is to educate yourself on your options. For some homeowners selling your house is the best option. If you need to sale your house fast, please click the link and complete the short form and someone will contact you within 24 hours. If you are not ready to sell, please continue to read the below information regarding the foreclosure process.
How Does Foreclosure Work?
Foreclosure is when the lender (Bank) takes back the property when the homeowner fails to make payments on a mortgage. The foreclosure process differs by state. Some states the banks are required to file a suit (judicial foreclosure), in other states, the lender can foreclose on the property without going to court (non-judicial foreclosure). However, the lender is required to provide written notices under the “power of sale” clause in the mortgage or deed of trust. Therefore, it is important for you to open all mail you receive from your lender and stay in communication with the lender during this process.
Foreclosure processes require that the borrower(s) be notified regarding the proceedings and generally involve giving public notice. State laws on giving notice and scheduling a foreclosure sale vary. Some states may also provide you with the right to mediation prior to foreclosure. Be sure to read your mail and any legal notices carefully and act promptly on notices you receive.
If I have missed mortgage payments; how long will it take before I face foreclosure?
The foreclosure process generally cannot start during the first 120 days after you are behind on your mortgage. Once the mortgage servicer begins the legal process, the amount of time you have until the actual foreclosure sale (auction) varies by state.
If I cannot pay my mortgage loan, what are my options?
First, call your mortgage services. The number can be found on the back of your mortgage statement, their website, or in the loan coupon book. When you speak to your mortgage services, be prepared to discuss the following:
- Why are you unable to make your mortgage payment?
- Is the problem temporary or permanent?
- Be prepared to discuss details about your income, expenses and assets (cash in checking and savings accounts, 401K, etc.…)
Alternatives To Foreclosure:
- Temporary Forbearance – This is a grace period (Temporary Indulgence) between 30 to 60 days, which may be granted to bring your mortgage current. This is appropriate if you have a contract for sale has been ratified and a closing date can be verified.
- Military Forbearance – Under the terms of the Service members Civil Relief Act, civilians that have a mortgage and join the military may be entitled Military Indulgence. Click here to learn more about Military Indulgence.
- Short-term Repayment Plan – This is a plan with your bank to repay your forbearance (missed payments) over the course of 6 months. Therefore, if your monthly payment is $1,500, and you’ve missed 10 payments, that equals $15,000.00. The $15,000 thousand dollars would be repaid over the course of 6 months, adding $2,500 on top of your $1,500 dollar payment. Your new mortgage payment for the next 6 months would be $4,000 dollars.
- Partial Claim – Do you have an FHA Loan? If you do, your lender may be able to work with you to obtain a one-time payment from the FHA Insurance fund to bring your mortgage current. You may qualify for Partial Claim if your loan is at least 4 months delinquent but no more than 12 months delinquent, and you are able to begin making full mortgage payments.
- Deed-in-Lieu of Foreclosure – As a last resort, you may be able to voluntarily give back your property to the lender. This won’t save your house, this option makes it easier and less expensive for your lender if you are in default. You can qualify for a deed-in-lieu of foreclosure if you are in default and don’t qualify for any of the other options. Your attempts at selling the house before foreclosure were unsuccessful, an you don’t have another mortgage in default.
- Loan modification – If your income has been reduced and you cannot pay the current mortgage amount, but could pay a reduced amount, you may qualify for a mortgage modification. You may be able to refinance the debt and/or extend the term of your mortgage loan. You will need to submit proof of your reduced income and your ability to pay a lesser loan payment.
- Get Forbearance – Forbearance is when your mortgage servicer, or lender allows you to pause or reduce your payments for a limited period of time.
- Short sell your home – If your house is not worth more than what you currently owe, the lender may allow a short sale. This will allow you to avoid foreclosure by selling your property for an amount less than the amount necessary to pay off your mortgage loan.
Be on the look out for the following foreclosure scams:
- Someone asks you to pay upfront for their help.
- They guarantee to get the terms of your mortgage changed.
- They guarantee you will not lose your home.
- Ignore request to sign over the title of your house.
- Do not send payments to anyone other than your mortgage company.
- The company offers to do a forensic audit.
- The company says they are affiliated with the government or uses a logo that looks like a government seal.