Are You Facing Foreclosure?

Managing Foreclosure: A Guide for Homeowners

Understanding Foreclosure

A mortgage lender uses your home as collateral for your mortgage loan. If you fail to make timely payments, the lender has the legal right to initiate foreclosure proceedings to recover the outstanding debt.

Steps to Take if You Are Behind on Mortgage Payments

1. Contact Your Lender: Reach out to your lender immediately if you are experiencing difficulty making payments. Lenders generally prefer to avoid foreclosure and may be willing to work with you to resolve your payment issues.

2. Respond to Correspondence: Do not disregard any communications from your lender. Acknowledge receipt of their letters and express your intention to collaborate on a resolution.

Possible Assistance from Your Lender

- Payment Plans: Your lender may offer a structured repayment plan to address the arrears.

- Extended Payment Terms: You might be granted additional time to bring your account current.

Alternative Options if Your Lender Cannot Assist

- Refinancing: Consider applying for a new loan with another lender to pay off the existing mortgage.

- Home Sale: Selling your home could provide sufficient funds to settle the mortgage balance and potentially leave you with surplus funds.

- Legal Consultation: Consult with a legal professional to explore bankruptcy options that may help you retain your home.

The Foreclosure Process

1. Notice of Default: Foreclosure proceedings commence with a Notice of Default, which details the missed payments and associated fees. You have a 3-month period from the date recorded on the notice to remedy the default.

2. Notice of Sale: If the default is not cured within 3 months, the lender may proceed with selling your home. You will receive a Notice of Sale, providing details of the sale date, time, and location. This notice must be mailed to you at least 20 days before the sale.

Preventing the Sale of Your Home

- Payment Deadline: To halt the sale, you must pay the total amount due, including fees, up to 15 days before the scheduled sale date.

- Last-Minute Payments: Payments made within the final 5 days before the sale must cover the entire loan amount.

Post-Payment Confirmation

Once payment is made, ensure that the lender records a Notice of Rescission to officially cancel the foreclosure sale.

Beware of Scams

Be cautious of individuals or companies that propose transferring the title of your property as a means to stop foreclosure. Such transfers do not prevent foreclosure or discharge your debt. Additionally, the foreclosure will still impact your credit report.