When a homeowner is unable to pay the mortgage of the home they have bought, the sale gets forfeited and they lose their right to that property. Getting involved in a foreclosure is an unfortunate time of anyone’s life owing to a number of legal and emotional reasons. On one hand are the feelings of losing your dream home, while on the other hand are the complicated legal proceedings which require you to be on top of everything going around.
You may have a number of questions regarding the foreclosure process if you are involved in or in the danger of getting involved in the foreclosure process. Through this article you can get answers to a number of questions that you may have in your mind regarding the foreclosure process. Have a look:
Question 1 – Carrying on communication with your lender
It is absolutely necessary and even recommended that you always keep in touch with your lender the moment you come to know that you will not be able to make the required payments anymore. Together, you and your lender can come up with an alternative payment structure so as to not lose the possession on the house. They can suggest ways to restructure and even refinance your loan. In addition to this, there are a number of other options that you can consider and it is your lender who you will need to communicate with throughout the uncertain phase. An option which your lender may suggest is of going through a short sale which means that you find a buyer and your lender is willing to accept their offer as a full payment even though it is lesser than your mortgage balance.
It is critical that you keep communicating with your lender throughout this phase as not doing so will not help your case in any way. You may even end up losing the property sooner than you might think.
Question 2 – Slowing down the process of foreclosure
There are number of ways in which you can slow down the process of foreclosure of the property. As mentioned above, one way to do so is to talk it out with your lender, but there are other alternatives as well. You can request your bank or your lender to see the original mortgage note which has your signature and on it and which is a proof that you owe them the debt. This will delay the foreclosure for a considerable period of time as mortgages tend to change owners more frequently then you might think. Your lender and bank will not be able to produce the note straight away and will require some time do to so giving you some time and delaying the foreclosure process. Also, what you can do is delay the court correspondence until the final deadline and choose to contest each step of the legal proceedings by hiring an attorney who will help you in doing so.
Question 3 – What are the options if someone wants to stop the foreclosure process and keep their property?
In such a case your best option is to hire the services of a foreclosure avoidance counselor who will guide about the options that you are entitled to. Another option is to sign up for programs which have been designed to help those who are going through the foreclosure process. These programs include Hope Now and Hope for Homeowners etc and they will help with ways to get a refinancing for your residential property. If you are looking for details regarding a counselor in your area or any of these programs regarding property owners, you can contact the Department of Housing and Urban Development in your area or visit their website.
Question 4 – How can someone stop the process of foreclosure if they do not want to keep their property?
In case you do not want to keep the property that is being foreclosed and want to stop the process, your best option is to consider a short sale which is seen as a less damaging alternative to getting a property foreclosed. Considering a short sale means that your credit history will not be damaged much owing to the fact that your bank will be paid and the property will be sold so it will not have to be foreclosed.
Question 5 – What is the exact process of foreclosure?
There a certain common aspects of how the process of foreclosure is carried on all the states, however they may differ depending up on the laws of the state the property is in. The common aspects include that the foreclosure process usually begins after the homeowner stops paying the mortgage payments and the bank sends them a default notice and demands them to pay the agreed upon mortgage amount. This is followed by the bank filing a case against the defaulter and obtaining a judgment to start the process of foreclosure. In most states the notice for a property being foreclosed is printed in newspapers and the bank is then allowed to seize the property and auction it to get the amount which was due on that property; they can also sell the property through a private real estate agent.
Question 6 – What is the duration of a foreclosure process?
There is no exact duration for a foreclosure process to last as it may take anywhere between 1 to 6 months and even more, depending upon the circumstances of the case. Duration of a foreclosure process depend also upon how quickly your lender chooses to move the proceedings.
Question 7 – Do you have to move out of your house immediately after your bank sends you a foreclosure notice?
When it comes to the moment of you leaving the foreclosed property there are a number of ways to do so. While you are not required to leave immediately, many homeowners do so owing to a number of reasons. You can choose to stay in the same house throughout the process of foreclosure or you may move out when the new owners, to whom the bank has sold the property, may move in. Details of this matter vary strictly from state to state but one is certain, until your bank gets a courts judgment you can stay at your home in most cases.
Question 8 – What if the homeowners do not want to leave the foreclosed property?
When all the court proceedings are over, the foreclosed property has to be left; in case you fail to do so, your bank holds the right to get it forcibly evicted and a sheriff may have to visit your place in such a case.
Question 9 – What happens after a property has been foreclosed?
The circumstances that take place after the process of foreclosure depend on the state in which the foreclosed property is in. In some states, the laws are a bit lenient and you can simply move out of the foreclosed property to another place and the matter is closed right there. However, in other states the bank involved in the process has a right to get a deficiency judgment against the owner of a foreclosed property. A deficiency judgment means that after the bank sells out the foreclosed property to another owner, they still hold the right to determine if you owe them anything so their loses can be fully recovered. This also includes their legal fees and the bank is still allowed to sue the owners of the foreclosed property if there is any more outstanding balance.
Question 10 – What happens to the equity of the owner of the foreclosed property?
After the foreclosed property is seized by the bank and it is through selling it, the profits from the selling of that property first go to the bank. If the owner of the foreclosed property gets a second mortgage, the lender of that property is the next in line to get a part of the profits and the homeowners of the foreclosed property are the last in line to get their share if a part of the profits earned is still left. But it is rarely the case as after the bank and the second lender get their share, there is hardly anything left for the owner of the foreclosed property. This means that the homeowners who lost the foreclosed property may also lose any investment that they have put into the house as far as the down payment and/or mortgage payments that they thought were building up their equity in that particular property.
This article has summed up the top ten questions that homeowners generally ask regarding the process of foreclosing a property. While these have just been jotted down to give you an idea of the whole process, if you are in real need of advice you need to get the services of a counselor or the Department of Housing and Urban Development in your area to guide you through the legal process.