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Foreclosure

Heading for foreclosure? Home Foreclosure Fighter will negotiate with your bank to save your home, Act Now!

Common Questions About Foreclosure

 

Falling behind on mortgage payments and going through a foreclosure procedure can often be a very scary event. Unfortunately, sometimes life situations change and the ability to continue paying a mortgage payment each month becomes an unbearable burden. Because foreclosure is a process and not an event people often times have questions that, when answered, help them to make better decisions about the process in which they find themselves. Let's answer some of those questions.

1. A home foreclosure is a process in which the mortgage lender attempts to recover money that is owed to them based on a promissory note signed at the time of closing. The collateral on that note is the home. In other words, you probably borrowed money from a bank or a mortgage company in order to purchase or refinance home. In exchange for the money you made a promise that the bank could take the home if you could not pay.

2. Can the bank come and kick me out of my house? The simple answer to that is no. Only a court can force you to leave your home but ultimately you will be evicted if you neglect to pay your mortgage company or work with your mortgage company to develop a satisfactory plan for both of you.

3. How long does the process take? From the time you miss your first payment until the final foreclosure sale can be as little as six months and as many as 10 depending upon the state in which you live. Different states have somewhat different allowable times built into their process. It will also depend upon your mortgage lender and how aggressively they pursue your case. This process can be extended when you work with your mortgage lender in an attempt to keep your home.

4. I'm getting a lot of mail, who's giving them my address? Once a home foreclosure begins the process is a public and legal one and so your name and address can become part of public information that is offered through the court system and published in certain journals. There are several types of people who will contact homeowners who are in foreclosure in an attempt to generate business for themselves. These may be mortgage brokers if there is enough equity in your home for a refinance, chapter 13 attorneys if you have the ability to complete a chapter 13 plan, mortgage negotiators who hold themselves out as professionals to help you save your home from foreclosure, private financiers who will privately arrange a loan, your mortgage lender and crooks and con artists. Any of the above professionals can also fall into the category of con artists. This means that it is ultimately your responsibility to thoroughly check out the people with whom you work in an attempt to keep your residence.

5. How do I find the best option for me? This is very complicated question that will depend upon the amount of assets and liabilities you hold. These assets include the equity in your home, cars that you own, other property you own, large amounts of jewelry or any other large ticket item that can be used to leverage against your mortgage. Your income, expenses and the underlying reason for the house to be in foreclosure will also help to determine the type of option that is best for your particular situation. In order to fully evaluate this you should work with a financial counselor or a counselor from the US Department Of Housing and Urban Development.

6. What happens when the house goes up for sale? Once a foreclosure is finalized the home will be placed at auction. At the sale the auctioneer will read legal notice is and descriptions of the property and then begin taking bids. If there are no pre-qualified bidders when the bid is made the auctioneer will ask for deposit check. Auctioneers will also attempt to solicit bids for higher amounts in the increments set by the auctioneer. Foreclosure deeds and purchase papers will be drawn up by the new purchaser and new mortgage holder. After the sale there will be a grace period to allow the original owner to pay the loan and bring the mortgage up to date thereby keeping their home. Once the closing date has been finalized the new owner will formally take the title to the property.

7. What if the auction bids are not enough to cover the debt on the house? If a mortgage was $200,000 and the high bid was $175,000 the balance owed would be $25,000. Under most loans in most states the original home owner would continue to be responsible for that $25,000 as an unsecured debt and a bank would have the legal right to pursue the debtor for repayment as they would for a credit card that had gone into arrears. Whether they do or don’t pursue the original homeowner will be up to the mortgage lender.

8. What are some of my options if my home goes into foreclosure? Fortunately most homeowners have several options they can pursue throughout the process of foreclosure. In the beginning of the process they can negotiate with their mortgage company to bring the loan back into good standing. They can work with the lender to modify the loan or attempt to qualify to have partial repayment applied to the end of the current loan. They may also be able to refinance a home with another lender before the process of foreclosure goes too far. Homeowners may choose to sell their home before the sale date or may be able to negotiate a deed-in-lieu of foreclosure during which you arrange to simply give the home to the mortgage company and walk away without any negative effect to your credit rating.

9. What is the first thing I should do? Because foreclosure is a scary process many people choose to ignore the communication that comes from their lending organization whether these are letters or phone calls. Unfortunately, this is one of the worst things that I homeowners can do. The very first thing an individual should do once they know they are in trouble or could get into trouble with their mortgage payments is to get in touch with their lender and discuss the problem with them. Mortgage lenders do not want your home. Rather they would have you pay your mortgage and keep your home while they collect the interest. Foreclosures are expensive for lenders and mortgage insurers without any promise of payments in the end. For this reason it is important for individuals to remain in contact with their mortgage company and negotiate a satisfactory settlement between the two parties.
 

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