A real estate lawyer can help you understand early home seizure and sale prevention. They can help with lender negotiations or the necessity of filing Chapter 7 or Chapter 13 bankruptcies and keep homeowners in their homes.
Young families look forward to homeownership and passing that property on to their children. Yet, so many are living pay check to pay check and struggling with fluctuating interest rates and the terms of repayment on their mortgage loans. Due to extenuating financial responsibilities of utilities, car payments, education, and sustenance, families fall behind on payments and end up in default.
After loan principal and interest have not been paid and communication on repayment options relinquished, the bank and lender can begin the foreclosure process. This is when the property is either seized or sold. The objective of a foreclosure attorney is to halt the process along the foreclosure timeline so that the homeowner can live in the property, while exploring and attempting a re-payment plan.
The requirements and timing of a foreclosure attorney varies depending on where you live. The largest determining factor is the different types of foreclosures the state could initiate. There is the judicial foreclosure, which involves court-issued notices of late payment. After the grace period, the property can be sold. This can take over a year to finalize.
The power of sale foreclosure occurs as a result of a clause was included in the actual mortgage agreement. During this process, the lender carries out each step of issuing multiple notices of missed payments, but only for a specified period of time. After which, the local court or sheriff’s office is given permission to sell the house at auction. Lastly, the quickest and harshest process is known as the strict foreclosure. Only a few states allow this type, but it accompanies a lawsuit against the default homeowner and if the court-ordered date of repayment is ignored to the point of mortgage owed exceeding the value of the home, the home returns to the lender.
This entire non-judicial foreclosure process can occur in as little as two months from the final notice. A foreclosure attorney has to first determine what type of home repayment/repossession process he and his client are dealing with before approaching the bank, lender, or local courts with negotiations. There are three types of these lawyers: there are those who work with real estate, consumer protection, and bankruptcy.
Your choice of lawyer can work with your lender to help you meet their requirements or help you with the highly technical process of filing for either Chapter 7 debt relief or Chapter 13 repayment plan. On one hand, if your Chapter 7 filing is granted, you will be allowed to relinquish some of your other high debt and therefore, make reasonable mortgage payments. On the other hand, if your Chapter 13 filing is accepted, you will be able to repay your mortgage over several court appointed and lender agreed upon years. So, as long as you speak to your lender, bank, and foreclosure attorney early, you should be able to avoid a lot of headaches, while preparing yourself for whichever outcome.
If you are having trouble paying your mortgage, you may be wondering about the possibility of foreclosure and whether you have any hope of saving your home once that process starts. The specifics vary by state, but the general outline is similar no matter where you live.
Mortgage Default
One missed payment will not put you in foreclosure, but it does bring you one step closer if you don’t bring your mortgage current. If you are having trouble doing that, talk with your lender right away about restructuring or modifying your loan.
Your lender will begin charging late fees sometime during that first month, and after 30 days your mortgage is officially in default. At this point your lender can begin foreclosure proceedings, although most will try to work out a resolution first.
Foreclosure Notice and Auction
If you did not make acceptable arrangements with your lender, you will receive a foreclosure notice, often about three to six months after you missed your first mortgage payment. This notice is basically your final chance to resolve your default. The notice will typically give you 30 days to do so.
The type of foreclosure your lender may use depends on what your state allows and the terms of your mortgage agreement:
- Judicial foreclosure: This is the most common type. It is overseen by the court, which authorizes your local sheriff’s office or a private company to hold a public auction once your payment deadline passes. It will use the proceeds to pay off your mortgage and any other liens on the property, and you receive any money left over. Some states require this foreclosure process.
- Strict foreclosure: The court also oversees the process, but instead of holding an auction gives title to your property to your lender. The lender is not obligated to sell the property, and if it does, you are not entitled to any of the proceeds. Only a few states allow this type of foreclosure and usually only when you owe more than the property is worth.
- Power of Sale: This type of foreclosure does not involve the courts. Your mortgage lender holds the auction and pays itself and any other lien holders from the proceeds. You receive whatever may be left. If you are facing foreclosure, it is a good idea to talk to a real estate lawyer. Contact us to be sure you understand all your options that apply to your unique case.
In many cases you are allowed to bid at the auction and, if you win, apply your current mortgage toward the price. You will still need to pay your debt to your lender along with additional costs related to the auction. If another person buys the property, and you are still living in the home, you will receive notice to move.
If you are facing foreclosure, it is a good idea to talk to a real estate lawyer. Contact us to be sure you understand all your options that apply to your unique case.