Foreclosure Does Not Always Equal Loss Of A Home
If youre a homeowner, its critical for you to understand what the foreclosure process involves and how to defend yourself. Its a common belief that foreclosure means youll automatically lose your home, but thats not always the case.
There are several factors that come into play when youre faced with foreclosure:
- Your specific financial situation
- Your willingness to work with the lender to seek a resolution
- Whether or not you choose to properly defend your home against foreclosure
Obviously, if you choose not to take any action, you can certainly expect to deal with foreclosure and the loss of your home.
Mortgage Foreclosurepay Your Mortgage To Avoid Your Lender Selling Your Home To Get Money Back
Foreclosure is what happens when you cant pay your mortgage and the lender takes over owning your home. The lender then sells your home to pay off what you owe them. You have no control over how the home is sold and will be given notice to leave the property, sometimes even before its sold. It depends on the circumstances as to when you have to leave.
Depending on the outcome of the sale and your overall situation, you may be required to pay any amount thats short if the home is sold for less than what you owe. That means you could lose your home, but still have to pay more to deal with your debts.
How Long Does Foreclosure Take
How long is the foreclosure process? How long from foreclosure to eviction? Normally, the real estate foreclosure process in New York currently takes about 445 days from the date of the first missed payment to the sale of the home.
However, due to the recent COVID-19 outbreak, in New York, Executive Order 202.8 barred the initiation of any foreclosure of any residential or commercial property until June 20, 2020, regardless of financial hardship. Executive Order 202.28 extends the moratorium to August 20, 2020 so long as the nonpayment of the mortgage is by someone that is eligible for unemployment insurance or benefits under state or federal law or otherwise facing financial hardship due to the COVID-19 pandemic.
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How To Prevent Foreclosure
As you can see, the foreclosure process in Florida can be long. So, rather than sit around and keep asking, how long does a foreclosure take in Florida, contact your lender and see if theres a payment plan to help get you caught up. You can also check into finding a company that buys homes for cash or contact a local attorney to assist you.
Home Foreclosures Can Take A Few Months To A Few Years Depending On Your State Laws And What Actions You Take To Stop The Banks From Illegally Foreclosing On Your Home
Every three months, more than 250,000 American homes go into foreclosure, according to the Mortgage Bankers Association.
However, not all states have the same foreclosures process or timeline. In fact, some states may be more lenient to homeowners or the agency that issued the home loan.
Here is how long foreclosure can take under certain circumstances, according to real estate and legal experts.
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Understanding The Foreclosure Process In Canada
Missing one mortgage payment might not necessarily be a good thing, but it wont put you in foreclosure right off the bat. Typically, you would have to miss at least a couple of payments before your lender starts the foreclosure process.
As a homeowner, your best bet is to get in touch with your lender right away after having missed even just one mortgage payment to explain why it was missed. Your lender will probably be more willing to take a late payment, work with you to rectify the situation, and get your payment schedule back on track, rather than going through the foreclosure process.
If the missed payments are simply the result of temporary financial problems, you might be able to avoid foreclosure and ask for specific concessions to be made on your mortgage payment schedule.
However, if defaulting on your mortgage payments starts to become a habit, your lender may have no choice but to start the process of taking back possession of your home. If you dont contact your lender about your missed payments, you could wind up with a written notice from your bank warning you that the foreclosure process will potentially start soon.
Heres what you need to know about Loan Default.
Day 180 Notice Of Trustee Sale
After youve received a Notice of Default, you have 3 months in which to attempt to get your loan current. As mentioned above, that means paying all back payments, interest, fees, property taxes, and insurance. After 3 months, the bank can officially set a date for the auction of your home. You will be notified that this has happened through a Notice of Trustee Sale that is typically sent to you via certified mail.
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Can I Give My House To The Lender In A Foreclosure
A foreclosure is a process which forces you to sell your house so that you can repay a lender. However, as long as you have only one mortgage on the property, there is another option. Rather than selling your property to repay them, it is possible to simply give the property to the lender directly. They can then sell it and keep the money from the sale. The legal term for this is deed in lieu of foreclosure and it is technically an alternative to foreclosure, rather than an option within it. If you choose to do this, then the lender will be responsible for selling the house. If the money earned from the sale is not enough to cover your debt to the lender, then they may sue you for deficiency after the sale.
Do I Owe Money If The House Sells For Less Than I Owe
In the event that your home sells for less than the balance owed, the lender can file something called a deficiency judgment. This is a lawsuit that requests the borrower pay the remainder of the loan amount. For example, if you owe $300,000 on your mortgage, but the house only sells for $275,000, the deficiency is $25,000. A lender might try to collect the outstanding balance.
Some states, however, have anti-deficiency laws or restrict deficiency judgments after foreclosure.
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Three: Affidavit Of Value And Affidavit Of Default Are Filed
- The lender will then file an Affidavit of Value, which includes an appraisal of the fair market value of the property, and an Affidavit of Default, which includes the amount that remains owing on the mortgage as well as the amount in default.
- Once this is done, the lender can pursue various remedies including sale of the property.
Do I Owe Property Taxes When My House Is In Foreclosure
Legally, youâre required to pay property taxes as long as you own the home. Sometimes, the lender pays the taxes in order to sell the home. If taxes become overdue, the government can seize the property, which would make it difficult or impossible for the lender to recoup what theyâre owed. Taxes are attached to homesânot peopleâso once the property is sold the taxes are the responsibility of the new owner.
âMortgage contracts will list how unpaid property taxes are handled,â says Leslie Tayne, head attorney at Tayne Law Group, a debt settlement law firm in New York. âLenders can sometimes front the property tax bill and send the owner a bill to recoup their costs. Some states do not allow collections on payments made by lenders after a foreclosure.â
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Types Of Foreclosure Procedure
The process and nature of a foreclosure vary by state and there are two kinds: judicial and non-judicial foreclosure. Only one kind of these can be in progress at any one time. In Texas, most foreclosures are non-judicial but well look at both kinds here.
Judicial foreclosure: Judicial foreclosures are the result of a lawsuit and are ordered by a court. This means that a court process is necessary for a judicial foreclosure.
Non-judicial foreclosure: In non-judicial foreclosures, a court process isnt necessary. The lender can force the sale of the property without one. As a result, non-judicial foreclosures are usually much quicker than judicial ones.
Foreclosure And The Coronavirus Pandemic
During this pandemic, which has created extraordinary hardship for millions of people, there are relief options available to homeowners. If you have a government-backed mortgage , youâre protected under The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act. This allows homeowners to get into a forbearance program if theyâre unable to make their mortgage payments because of COVID-19. Currently, there is no expiration date for this benefit.
âForbearance is not automatic, you have to request itâdonât just stop paying your mortgage,â says Cristian Salazar, deputy director for communications at the Center for NYC Neighborhoods, a nonprofit that promotes affordable homeownership in New York. âContact your servicer and explain that you have been affected by COVID-19. Itâs critical that you make every effort to pay your mortgage until you have the opportunity to speak with your servicer.â
Stopping payment on your mortgage before speaking to your servicer could put you at risk of being ineligible for future relief, Salazar says.
Here, weâll go over the basic foreclosure process and what you can do to avoid foreclosure. Keep in mind, foreclosure procedures and laws vary by state.
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How Long Is The Pre
For an owner-occupied, one to four family dwelling, or a condominium unit, New York law requires the foreclosing bank to send a foreclosure notice to the borrower at least 90 days before starting the foreclosure. .
If the lender or servicer doesnt send the 90-day notice at all or doesnt strictly comply with all of the laws requirements, you could have a powerful defense that might result in a dismissal of the foreclosure action. If you think the lender or servicer didnt comply with the 90-day notice law, consider talking to a lawyer to get specific advice about your situation.
Bankruptcy Mortgage And Foreclosure Contact Us For Help About What To Do
If youre having trouble paying your mortgage and are worried that you might be facing foreclosure, contact us for help right away. You will have more options available to you if you ask for help sooner rather than later. Sometimes, once you deal with your debts and other bills, you can catch up, resume regular mortgage payments and stay in your home. You can get more information about bankruptcy and avoiding mortgage foreclosure by calling us at , , or chatting with us online now.
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Common Questions About Bankruptcy Foreclosure
A common question about foreclosure vs mortgage bankruptcy is how the process works. Many people wonder if theyll lose their home or not, what rights their mortgage lender has, or if getting a loan will help them. Some of your questions might be answered in the information above.
In Canada, when you declare bankruptcy, your mortgage isnt automatically in foreclosure. Your mortgage is a secured debt, so it isnt included in your bankruptcy. The rules in each province are a little different, so your trustee will explain what happens to your home and your mortgage if you declare bankruptcy, and how declaring bankruptcy can affect foreclosure.
How To Stop Foreclosure
While either method of foreclosure can be successfully challenged or delayed by a foreclosure defense attorney, the court oversight of judicial foreclosure allows more procedural leverage to slow down aggressive lenders. It is important for consumers to understand that they have rights in the fight against foreclosure. Power of sale jurisdictions allow for your property to be sold outside of court supervision but youre still required to receive adequate notice of the sale and sale price. Most power of sale jurisdictions offer borrowers the opportunity to seek an injunction preventing a foreclosure sale if irregularities are found or the lenders right to foreclose is in question.
Bankruptcy, although a last resort, will stop foreclosure dead in its tracks due to the automatic stay that freezes all creditor collection actions the minute a case is filed. Filing bankruptcy the night before a home is scheduled to be sold at auction can temporarily stop the process. Chapter 13 bankruptcy may allow you to stay in your home while getting caught up on mortgage arrearages that have spiraled out of control.
You have options and there is help available, but remember if you are in a power of sale jurisdiction and have executed a deed of trust with your lender, the foreclosure process can be completed in a matter of months. Be careful, and good luck.
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You Dont Automatically Lose Your Home If You Default
Following a missed or late mortgage payment, you dont automatically lose your home. Lenders dont want to foreclose if they dont have to, as its an expensive process and takes time. A lender will likely not start to foreclose until after two or three months of missed mortgage payments.
If you miss a mortgage payment, the lender will usually send a reminder letter. If they dont hear from you or receive the missed payment, the lender will then follow up with a demand letter.
In fact, under the law, the lender must send you a demand letter before they can start legal proceedings to take your home.
The demand letter must say exactly what you owe. It must also say that:
- you have to pay a certain amount by a certain date to catch up on what you owe to reinstate your mortgage , or
- you have to pay the whole amount you borrowed plus interest and expenses to redeem your mortgage .
Exploring options with the lender
If you have a short-term problem, like a temporary layoff from work, you may be able to negotiate with the lender. For example, you might offer to make smaller payments for a time, and add the amounts you fall behind to the total amount of your mortgage. Or, you might offer to make smaller payments for a while and a larger catch-up payment later. Most lenders would rather make some sort of deal and keep the mortgage in good standing, instead of starting foreclosure proceedings in court.
Four: Redemption Order Is Granted
- Once the two affidavits are filed by the lender, the court will generally grant a Redemption Order.
- The order grants the borrower a specified period of time within which the outstanding mortgage payments must be made and further provides that if these payments are not made within this period of time the property will be offered for sale.
- The redemption period will vary depending on a number of factors including equity in the property.
- The redemption period can often be extended with the help of a lawyer.
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What Is A Redemption Period After A Foreclosure Sale Date
In some states, youre allowed to buy back your house after the foreclosure sale. The extra time you have to reclaim your home is called the redemption period. To redeem, the foreclosed homeowner must either reimburse the new purchaser for the amount paid at the sale or repay the total mortgage debt to redeem the property. If, though, the foreclosed homeowner doesn’t redeem the home, the person or entity that bought it remains the new owner after the redemption period expires.
The length of the redemption period varies from state to state, and depending on state law, you might get the right to live in the home during this time. In Michigan, for example, foreclosed homeowners are usually entitled to a six-month redemption period after the sale and can remain in the home, subject to some exceptions. North Dakota law, similarly, allows the homeowner to live in the property during the redemption period, which is usually 60 days. Not all states allow the homeowner to live in the home until the redemption period expires, however. To find out about the laws of your state, contact a local attorney.
Is Foreclosure A Lengthy Process
Foreclosure is the legal process mortgage lenders use to take ownership of a house if the borrower doesnât make the mortgage payments. How long foreclosure takes depends on many factors, but mostly on your stateâs laws. Each state has different rules that affect the timeline, such as:
Whether the lender must file a lawsuit and get a court order to foreclose
How much notice a homeowner gets before the sale
What opportunities a homeowner has to dispute the foreclosure and
Whether the lender and homeowner must try mediation before the sale.
Depending on your state and your lender, the amount of time between your first missed mortgage payment and a foreclosure sale could be as short as a few months or as long as several years.
There are also federal laws that apply to foreclosures in all states. For example, the Real Estate Settlement Procedures Act says that your lender canât begin state foreclosure proceedings until your payments are more than 120 days past due.
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Once a house is sold in Pennsylvania, there is no right of redemption, and adeficiency judgement may be used against the borrower. This means that you may owe the difference between what the property sold for at auction and what you owed on the original loan. All in all, the consequences of foreclosure could absolutely devastate your future stability.
With the help of a reputable Philadelphia attorney like myself, you may be able to utilize several time- and trial-tested techniques to save your home and finances. My goal is to take control of the situation, evaluate all your options, and do everything in my power to get you to a comfortable, beneficial solution. If you have questions, I have the answers.
To learn more, be sure tosubmit our online contact form to request your free consultation.
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