1. If I fall behind in payments, what should I do?
The number one thing you always want to do when facing a foreclosure is NEVER avoid your lender. You want to act quickly to stop the foreclosure and contacting your lender is the first step. Let them know you have received all notices and that you want to work with them to resolve the issue fast. Most lenders do not want your home because they are not in the business to own real estate. They want to lend money. Consequently, they will work with you as much as you are willing to work with them.
2. What options are available through my lender?
Your lender could do several things when it comes to assisting you. The most common is to grant a payment plan on the amount that is past due. Other options may include adding the amount in arrears to the end of your loan, which means your loan would extend by the number of monthly payments you are behind.
3. What if my lender does not provide any assistance?
A couple of options you can examine are calling another lender to see if they would refinance your existing loan. This is not a reliable option because most lenders won't refinance your loan if you are behind in payments or do not have the income to qualify for the loan.
Selling your home is an option especially if you have equity. Equity is the difference between what your home is worth and your loan amount. If you do not have equity, short selling your house is another option. Perhaps, the bank will accept less than the loan amount as the full payoff.
Speaking with a lawyer is yet another option. An attorney can review your loan documents and possibly find something to litigate with; thus, canceling or postponing the foreclosure. If not, filing bankruptcy can help you keep your home as well.
4. What is the foreclosure process?
There are two types of foreclosures: judicial and non-judicial. In general a judicial foreclosure has to go before the courts while a non-judicial foreclosure does not. We won't go into details because all you need to know is that the typical foreclosure starts approximately 3 months after your last payment. It could be slightly shorter or longer. Keep in mind, the lender has the right to start the foreclosure proceedings the day after you become delinquent.
After your delinquency, you'll receive a Notice of Default indicating that you are facing foreclosure. The notice will outline the amount in arrears, what's required to stop the foreclosure, and important dates. Most states allow for a redemption period-a time prior and subsequent to the actual foreclosure sale whereby the homeowner can redeem the home. The closer you get to the foreclosure sale date the more the lender will want the entire loan amount to be paid in full. This is why you must act quickly and early.
5. When can my lender sell my home?
Prior to the lender selling your home they must notify you of the sale. Typically, the sale will appear in a legal newspaper. The notice should contain the date, time and place of the sale. It also must appear as public information a certain number of days prior to the sale, usually 20 to 30 days.
6. How do I stop the sale of my home?
There are no magical solutions for stopping a foreclosure. As mentioned before, you may pay the amount requested by the bank, sell your home prior to the foreclosure sale, file bankruptcy, etc.
7. Watch out for scams!
There are many legitimate companies and organizations that will assist in stopping a foreclosure. However, a lot of them are scams. Watch out for people who promise to stop the foreclosure by having you quitclaim the property to them. Oftentimes, they will make an offer that is attractive to you, promise they can help, wait until the clock runs down, and then approach you with a lower offer when it's too late. Consequently, you feel pressured to accept the below-market offer.
In summary, there are several things you can do during a foreclosure proceeding. Check all available options and resources before deciding on the alternative you will use to stop the foreclosure. Include consulting an attorney once you've narrowed your choices.
CP Howard is the co-founder of MaxCap Realty, a licensed real estate broker, author, teacher and speaker. Avoid Foreclosure Hell eBook is for immediate download at www.HelpStopTheForeclosure.com Blog site: http://blog.MaxCapLLC.com Website: www.MaxCapLLC.com
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