If you have recently received a foreclosure notice on your home the first thing you should do is not panic, this will never save your home from being in foreclosure. So, take a deep breath and keep calm and know your options.
Having a place, you lived in, own and are able to pass down to your children is the American Dream. But, most of the time things don’t work out as planned which can create a sense of fear and frustration as you try to keep up with ends meet and avoid the foreclosure nightmare. If you think you are the only one who is in this situation, then you are wrong. According to Mortgage Bankers Association “every three months, 250,000 new families enter into foreclosure” which means that people from all income levels are suffering from the clutches of foreclosure even as we speak. And most of the time when you try to get help from going online to try to understand the foreclosure process you would most likely get lost or miss important detail because of the many real estate terms and jargons that are involved.
Through this article, we’ll lead you through a few helpful tips to make you understand foreclosure isn’t the end of the line for you.
Let’s get started with what you will need to follow when facing foreclosure…
1. Check Your State Laws
The first thing you must know is that every state has its own law for foreclosure. So, it would be wise before jumping to conclusions to go through the State’s Laws on foreclosure. Now depending on the foreclosure, you can either be in a judicial or non-judicial foreclosure.
For a non-judicial foreclosure, there are no courts that are involved. Which means the lender doesn’t have to go through the courts to file the foreclosure, they would just send you a ‘notice of default’ and also a ‘notice of sale.’
Meanwhile in a judicial foreclosure everything gets a bit more complicated. You’ll first be sent a complaint along with a summons to the court. Meaning that the lender has already filed a lawsuit against you. If you receive a court summons you should not miss the deadline at any cost, as the court will be more in favor of your lender and allow the foreclosure to proceed.
2. Nothing Happens Overnight
Some homeowners think foreclosure happens overnight, but the fact is foreclosure begins once you miss a couple of monthly payments. Customarily, the lender will send you a notice of default just after you miss three to five monthly payments and they’ll usually specify an amount that you need to pay to cover up for the defaulted loan, also called a payoff amount and a deadline along with it.
So, depending on the lender you’ll have a minimum of three to five monthly payments before you get a letter in the mail.
3. Understanding Judicial Foreclosure
So far you should understand the tip of the iceberg that is foreclosure. Now to get into the nitty gritty of understanding a judicial foreclosure. When in a judicial foreclosure the court proceedings can take a long time, sometimes up to a year. During this time, it would be in your best interest in finding a new home, but if you fail to find a second home within the deadline of the foreclosure, you will be meet with an eviction notice.
4. Call Your Lender
Most of the time calling your lender works in your favor. Just remember to keep your cool and explain your current situation. Always try to reason with the person you are speaking with for an extension on your mortgage pay off time. This could hopefully help delay your foreclosure if your lender agrees.
5. Your Last Resort
Many people think filling for bankruptcy is the final stop on a path to financial ruin, but there’s hope even in bankruptcy. Chapter 13 is most likely your last resort. Find yourself a lawyer who you can trust to help you file a Chapter 13 bankruptcy, which will force your lender to negotiate a payment plan for you. But, remember only use this as a last resort only. Filing for bankruptcy can really hurt your credit score and having a filed suit against a lender can drag you into much deeper hole than you are already in.
If you don’t want to fill for bankruptcy and are looking for another option, your lender will most times give you the option to clear your dept with a short sale. A short sale is when you allow to negotiate a payoff amount for less than the balance remaining on your mortgage is. Often times, a mortgage lender will agree to a short sale to get the bad loan off their books, and this can most times ultimately reduce or eliminate your mortgage debt.
With time and preparation, you can get yourself out of foreclosure. The main thing you must remember if you’re in this situation is to keep calm and know your options. Just make sure you don’t until last minute to act on your foreclosure. But in the event where you do get foreclosure on you only need to vacate the property once there’s a new buyer. So make sure to save up some cash and look for a better much more affordable place to rent.
If you do take to option of doing a short sale your lender would have a pretty tricky time finding a buyer for a property under foreclosure. There are many skilled real estate agencies like ‘sims management’ that are available to help ease the pressure and the nightmare of foreclosure by giving you experienced advice on foreclosure to help the process move smother and finding a buyer for the property.
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