Top 10 Questions About The Foreclosure Process
If you are in danger of having your home foreclosed on or involved in a foreclosure, you may have many questions about the foreclosure process. Read on for the answers to the top 10 questions about the foreclosure process.
- Should I talk to my lender during the process? Yes, you should always talk to your lender as soon as you know you can’t make your payments. Your lender may be able to help you restructure or refinance your loan. They may be willing to work out a repayment plan with you. They can also help you to explore other options, such as a short sale, in which you find a buyer and they accept that buyer’s offer as full payment even if it is less than the remaining mortgage balance. Not talking to your lender is the worst thing you can do since it precludes the possibility of working something out and can make your lender want to foreclose sooner.
- Is there anything I can do to slow down the foreclosure? There are a number of things you can do to slow down the foreclosure. In addition to talking to your lender to try to work something out, you can also request to see the original mortgage note. This is the note you signed that proves you owe the debt. Mortgages often change hands many times and it may take the bank or lender a while to find this note- slowing down he mortgage process. You can also contest each step of the legal proceedings leading up to foreclosure, or hire an attorney to do so for you, and delay answering court correspondence until right up to the deadline.
- Is there anything I can do to stop the foreclosure if I want to keep my house? You should speak with a foreclosure avoidance counselor, or consider programs such as Hope for Homeowners or Hope Now which may help you to refinance your house. Information about these programs and finding a counselor in your area can be found at the Department of Housing and Urban Development’s web page.
- Is there anything I can do to stop the foreclosure if I don’t want to keep my house? If you don’t want to keep your house, your best alternative to foreclosure is likely a short sale. This will be less damaging to your credit and the bank won’t have to foreclose, since the house will be sold and they will be paid.
- What is involved in the foreclosure process? While the specific procedures vary by state, there are certain commonalities in nearly every jurisdiction. For example, the foreclosure process usually begins when you stop making mortgage payments. The bank will send you a notice of default and a demand to pay letter. The bank will also have to go to court and get a judgment of foreclosure against you in most states. Notice will likely be printed in the newspaper. The bank will then seize your home and sell it at auction to obtain the balance due on the mortgage. If it doesn’t sell, the bank will sell it through a private realtor.
- How long does the process take? The exact length of time the foreclosure process takes depends on how quickly your lender moves and what the circumstances are in your case. It can take anywhere from one month to six months or more from the time you begin missing payments.
- Do I have to leave my house when the bank sends me notice of foreclosure? You generally do not have to leave your home immediately. Many homeowners stay in their houses during the entire foreclosure process. Some stay until the bank has sold the home to a new homeowner and the new homeowner has them evicted. The specific rules for when you have to leave may depend on the state law and on exactly when the bank seizes the home. Until the bank gets the judgment of foreclosure, though, you still likely have a right to stay where you are.
- What happens if I don’t leave my house? If you don’t leave your home, eventually the bank or new owners will forcibly evict you. This may involve having a sheriff come to your home.
- What happens after the foreclosure? The answer to this depends on where you live. In some states, you simply move on after foreclosure and that is the end of it. In others, the bank can get a deficiency judgment against you. This means that after the bank sells your house, they will determine what you still owe them in order for them to fully recover the amount they lent you, as well as their legal fees. The bank can then sue you for that outstanding balance.
- What happens to my equity in my home? When the bank seizes your home in foreclosure, they sell it. Any profits from that sale first go to the bank to pay back the mortgage and any fees and costs. If you had a second mortgage, that lender is next in line. Once all the mortgages are paid off, if there is anything left over, you get that money back from the bank. Unfortunately for most homeowners, there is rarely a lot of money left over. This means you may lose any investment you put into the home as far as a down payment or mortgage payments that you believed were building up equity.