You worked hard to buy your home. But then you fell behind in your mortgage payments, and now you are facing foreclosure. Learn more about home foreclosures and options you can pursue to prevent them from happening.
What is Foreclosure?
In its most basic definition, foreclosure means that your mortgage lender can repossess your house due to missing payments. The lender can sell your home to pay off the debt you owe.
When the home foreclosure process begins will depend on your mortgage agreement. In most cases, it occurs three to six months after you miss your first payment – assuming you didn’t make up the missed payment. To determine if your house can be legally foreclosed based on the number of payments you missed, contact an attorney.
What Happens During a Home Foreclosure?
While the home foreclosure process can vary in each case, there is a general process most mortgage foreclosures follow. The typical steps are:
- The mortgage lender provides the homeowner with written notice of default. This lets you know you are behind on your payments and are in default on your loan.
- After receiving the notice, you are then given a period to pay the past due amount. The amount you owe can include the missed payments, in addition to interest, penalties, attorney fees, and other fees.
- If the time period passes without you paying off the debt, then the mortgage lender will provide you a notice of a foreclosure sale.
- After the foreclosure sale, you have a redemption period where you can reclaim your home.
How to Stop a Home Foreclosure
There are ways you can prevent a foreclosure on your home before the lender starts the process.
Some ways are:
- Pay your missed payments: If you know you are behind on your payments, or after you receive the first notice of default, you have a window to pay off what you owe. Your lender will be less likely to pursue foreclosure if you pay your past-due payments and stay current on upcoming payments.
- Request a loan modification from your lender: If you need help making your payments, your lender may work with you. Requesting a modification to your loan can temporarily reduce your payments and help you get caught up on past-due payments.
- Ask for a short sale: If you cannot make the payments on your house, you can ask the lender for a short sale on your property. This is when you sell your property for less than the mortgage value. You must sell the house to a third party, and the proceeds will go to the lender to help pay off your loan.
- File for bankruptcy: Another option is to file for bankruptcy. Filing for bankruptcy puts a stay in place that means lenders must stop all collection procedures until the bankruptcy is resolved. Depending on the type of bankruptcy you file, and what the arrangements are, you may be able to keep your home.
- Contact an attorney: When weighing your options for how to stop a foreclosure, make sure you know what legal rights you have and what options you have to proceed. An attorney can review your mortgage agreement and determine if the lender has the right to foreclose on your home. If you choose to pursue bankruptcy, a bankruptcy attorney can review your finances and your situation and determine the best type of bankruptcy to petition for. He or she will also advise you on how it will impact your assets.
Contact an Attorney
To learn more about avoiding a foreclosure on your home, it’s crucial to hire an experienced attorney to help you through the process. Don’t let debt ruin your life. Call (405) 529-9377 for a free case review.