How Long Can I Stay In My House Payment Free
Usually, you can stay in your home until the foreclosure sale is concluded. Foreclosure is not a short process and entails a number of steps. In fact, if you decide to fight the matter in court, you can stay in your house until the matter is resolved and not make a single payment during that time.
However, that does not mean you will not have to pay attorney and courts costs after all is said and done. Nevertheless, as long as you are involved in the foreclosure process, you can stay inside your house
What You Need To Sign
If you are approved for this foreclosure prevention method, the lender will require that you sign certain documents. These documents include the following:
- A deed that transfers the ownership of the real estate to the lender
- An estoppel affidavit
- In some instances, a deed in lieu agreement may be included
The estoppel affidavit establishes the terms of the contract and will feature a provision that the homeowner is acting of his or her own free will. It might also contain a provision that states that the transaction covers the complete debt satisfactorily.
A deficiency in a deed in lieu of foreclosure agreement is the difference between the entire debt and the propertys fair market value. In most instances, completing a deed in lieu of foreclosure will release a borrower from all liability and obligations. California law protects homeowners from receiving a deficiency judgment from a lender, or seeking the difference of the fair market value and the amount owed. Nevertheless, you can still incur a tax liability for your forgiven debt.
Avoiding Deficiency judgments
If you decide to sell your house in a foreclosure sale, but you still owe a balance, that balance is considered a deficiency. Even if your house sells for the exact amount owed, a lender could still claim that you are deficient. He may want money owed for the costs associated with foreclosure.
Income tax liability for deficiencies
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How To Stop Foreclosure: Filing For Bankruptcy
Bankruptcies are typically filed under either Chapter 13 or Chapter 7 bankruptcy. There are some important differences between Chapter 13 and Chapter 7 bankruptcies, especially when it comes to what happens to your property. Additionally, there may be risks associated with these which should also be explored.
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How Does A Reverse Mortgage Work
Although some private lenders offer their own version of a reverse mortgage, the most common type of reverse mortgage is a home equity conversion mortgage . This type of reverse mortgage is backed by the Federal Housing Administration . The amount that may be borrowed is based on the appraised value of the home . With an HECM, you can borrow money from a lender with your home as the guarantee on the loan. You can use the proceeds to pay off your existing mortgage or to cover living expenses, medical bills, travel, or other costs.
An HECM is only for homeowners who are age 62 or older. The loan with a reverse mortgage is repaid when you no longer live in the home. If you sell the home and move, move into a nursing home or assisted living facility, or die, then the home is sold to pay the reverse mortgage. Or your heirs can pay off the loan and keep the home.
What Happens If You Do Not Respond
If you do not respond in any way, shape, or form to a judicial summons, the lender wins the case and a foreclosure sale will be scheduled. If you object to the foreclosure, however, you can explain your reasons for objecting to the action. The judge, in turn, will decide whether the home can be sold. Borrowers should hire an attorney if they become embroiled in this type of legal action.
Responding to a Power of Sale Non-judicial Foreclosures
As the name suggests, non-judicial foreclosures do not go through a court process. As a result, they proceed more quickly and with less expense. Most of these processes only last a few months after the NOD has been issued.
Receiving Notice
In a non-judicial foreclosure, the borrower receives notice of default and is informed when a sale is scheduled. The notice is recorded in the real estate records of the county, posted on the property, or mailed to the home owner. A Notice of Sale is published in the area newspaper to alert the public. This is published 90 days after the NOD or Notice of Default has been recorded.
The auction date depends on certain factors. Technically, the auction can be scheduled 20 days after the Notice of Sale is posted. However, the auction can be delayed as long as a year if you wish to try to save your house.
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How To Contact Your Lender
Lenders want their money repaid in a timely way and the interest that comes with it they dont want your house. If you seem to be a good risk, the lender will offer to help keep your mortgage afloat, but be forewarned: If you seem like a bad risk, the lender might cut its losses by taking steps to foreclose and evict you as quickly as possible.
The key is to communicate with the lender before your debt gets the better of you. The sooner your lender knows of your problem, the more help it can provide. As you work to find mortgage relief, keep copies of all communications with your servicer, as well as records of who you communicated with. Follow up every phone call in writing, too.
Federal law requires mortgage servicers to help delinquent borrowers and work with them to get back in good standing. Tell your bank or lender that you want to learn about options for loss mitigation, the technical term for avoiding foreclosure.
Also, look for a letter from your lender describing options for avoiding foreclosure, along with instructions and applications for any programs that might apply to you.
Your mortgage servicer should also provide a contact person available by phone to answer your questions and provide accurate information about your options for avoiding foreclosure. By law, this person should be assigned to you within 45 days after your loan becomes delinquent, according to the Consumer Financial Protection Bureau.
Can I Keep My House
You can keep your house if you are facing foreclosure. You can find out more about various ways to hold onto your property by speaking to a competent lawyer. After all, everyones lifestyle and budget is different. Usually, you can apply for a loan modification or a reverse mortgage and stay in your home. You may also opt to file bankruptcy.
Below are some ways you can keep your house and avoid foreclosure proceedings.
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Reasons To Consider Completing A Deed In Lieu
A deed in lieu of foreclosure is a great option for a number of reasons. First, it avoids the foreclosure process. This means that, you, as the homeowner will not have to experience the foreclosure process. While this may seem like an insignificant reason to hand over the keys to your home, the foreclosure process is often frustrating, demeaning, and combative, leading many to avoid it at all costs.
Second, a deed in lieu of foreclosure is much cheaper for the homeowner than the foreclosure process. You will not have to hire an attorney to navigate the court proceedings, nor will you have to pay the fees associated with the foreclosure that lenders typically add on to the mortgage balance.
Finally, many lenders are so willing to enter into these agreements, that they offer incentives for homeowners. Sometimes called cash for keys programs, your lender may be willing to pay you upfront for the keys to your home, even if you do not have equity. This is because they save significant amounts by not having to go through the foreclosure process.
Hiro: The Mortgage Relief Refinance Program
HIRO stands for the High Loan-to-Value Refinance Option. This program is offered by Fannie Mae, but Freddie Mac has similar options available. This program helps homeowners who wish to refinance, but have little to no equity in their homes. In fact, through this program, homeowners can refinance even if they have less than 3% equity in their homes, which would otherwise be nearly impossible to do.
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Understanding How To Stop Foreclosure And The Current Housing Market:
Getting relief from your mortgage and avoiding foreclosure can happen a number of different ways, and theyre all a little bit different
Here are the 5 ways to stop foreclosure or get mortgage relief:
Additionally, given the impact of COVID on the housing market, FHFA has a list of resources for distressed homeowners looking for mortgage relief. Many of these seem appealing but arent as beneficial as they sound A forbearance is an option that FHFA and the CARES act have given any distressed homeowner during this crisis, so that is where well start in the process of mortgage relief.
Work With The Making Home Affordable Program
The Making Home Affordable program provides help, including free counselors for advice and assistance with keeping you in your home or getting out safely. Visit the MHA website to learn what options you have and what you need to prepare.
Your state’s housing agency might have a foreclosure avoidance program as well.
If you have an FHA loan, call the FHA National Servicing Center at .
Beware of mortgage relief scams. One sign of a scam is when they ask for a fee in advance. Learn how to spot housing scams and report housing scams.
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Can You Stop The Bank From Taking Your Home
If you dont make your mortgage payments, its hard to stop the bank from taking your home, but you do have a few options:
- Deed in lieu of foreclosure You can hand over your property deed in exchange for the lender wiping out the mortgage. While you cant stay in the home, you wont have a foreclosure on your credit report
- Short sale The bank may agree to settle your mortgage for less than its balance by accepting a lower sales price. You lose the home, but dont have a foreclosure on your credit report.
- Loan modification If the bank will modify your mortgage, you can keep the home and have new, more affordable payments.
- Reinstatement With the help of an attorney, you may be able to get the bank to reinstate your mortgage at its previous amount and allow you to keep your home if you can afford the payments
How To Get A Deed In Lieu Of Foreclosure
Lenders are generally willing to enter into a deed in lieu of foreclosure transaction because it saves them the costs associated with foreclosure. This is especially true in New York, where judicial foreclosures are lengthy and expensive. To begin the process, you should contact your mortgage lender before the formal summons and complaint are served. While it is possible to enter into an agreement after the proceedings have started, the earlier you reach an agreement with your lender, the more willing they may be to help and may even provide financial incentives.
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Forbearance Or Repayment Plans
A forbearance or a repayment plan are temporary agreements that may help stop the foreclosure process.
A forbearance lets you pay less for a certain amount of time. However, most often, any unpaid amounts will be due at the end of the forbearance. Before entering into a forbearance agreement make sure you understand its terms and whether you will be required to make a large lump sum payment at the end of the forbearance period. As you near the end of your forbearance, be sure to discuss other options with your servicer.
If you had a setback for a short time but now have increased income, you may want to ask about a repayment plan. In a repayment plan, you pay an increased amount for a short period. This allows you to catch up on missed payments over time. In the end, you cure the default without changing the loan terms.
How Does Foreclosure Mediation Work
The mediation process generally requires the homeowner to take a serious look into their finances. The homeowner is expected to have an accounting of all expenses and sources of income. This is so that the parties can determine what the homeowner can pay and weather that amount is sufficient for both parties.
In New York, the settlement conference begins shortly after the foreclosure complaint is filed. It is mandatory that each party attend. A court employee will act as the mediator and facilitate discussion. The homeowner and lender will consider a number of options, such as reducing future payments, applying a lump sum, amortizing past due amounts over a set period, and refinancing the home if there is built in equity. There may be multiple settlement conferences depending on how complex the situation is.
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Your Home Is In Disrepair
If your home is in disrepair, find out exactly which repairs must be completed to comply to stop foreclosure. If you can pay for the repairs, consult with various contractors for estimates and choose one that you trust. Make sure that you have a signed contract of work outlining the agreed upon terms before any work starts. If you are unable to pay for repairs, talk with your local AAA office to see if there is assistance available to help you cover the costs.
The Homeowners Bill Of Rights: When You Can Sue
Because of the implementation of the Home Owner Bill of Rights in California, homeowners can sue the servicer or lender for violations made under certain sections of this law. Relief includes injunctive relief or relief for actual damages if the trustees deed has been recorded.
Moreover, if the court finds that a violation was reckless, intentional, or resulted from willful misconduct by the servicer of the loan or the lender, the court has, in its power, the right to award the borrower the greater of three times the actual damages or statutory damages in the amount of $50,000.
Do You Meet the Criteria for the HBOR?
The safeguards given to homeowners through the Homeowners Bill of Rights or HBOR apply to first lien mortgages for properties that meet the following requirements:
- Owner-occupied residences
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Ignoring Calls And Letters From The Bank
Your lender will want to communicate with you if they fear you are in risk of foreclosure. These letters may at times seem threatening, but do not be intimated. Staying in communication with your lender can help you stay informed and potentially resolve the issue at an early stage. Ignoring the 90-day pre-foreclosure notice in particular is a costly mistake many homeowners make.
What Is A Deed In Lieu Of Foreclosure
A deed in lieu of foreclosure occurs when the homeowner, not wanting to have a foreclosure on their record and have their home auctioned off, agrees to hand the deed over to the lender in full satisfaction of the mortgage. Essentially, it allows the homeowner to surrender the home and all built up equity therein in exchange for the lender releasing them from the mortgage obligations.
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Stage One: Missed Payments
In the initial stage, your mortgage payment is due, and you miss it. And then maybe you miss another payment and another. During this period, the bank will likely:
- Make contact.According tofederal mortgage servicing rules, in most cases, the bank must try to reach you on the phone by day 36 of delinquency and by mail prior to day 45 to explain what you owe and inform you about loss mitigation options.Loss mitigationis industry-speak for solutions to fix your debt with the bank. We will discuss what may be on the table in the next section.
- Send scary letters.Later in the missed-payments period, if you haven’t worked it out with your lender you will likely get some version of a breach letter, according to the Department of Housing and Urban Development foreclosure timeline. Thisdemand letteroracceleration letterwill outline what you owe and give you a period of time to remedy it before the loan is accelerated and a foreclosure is initiated. The “acceleration” part is how the few thousand dollars you may have owed in missed payments becomes the entire balance of the loan.
Thosefederal rulessay lenders must wait untilafter 120 daysof missed payments to begin any foreclosure action on a borrower’s principal residence, with few exceptions. States may stipulate a time period greater than that and particular mortgage documents could have other requirements of the lender before entering the next stage.
Ways To Stop A Foreclosure In Its Tracks
Jenna Taubel About The Author
Have you received a foreclosure notice in the mail? If so, its imperative for you to take swift action against it. Not only can a foreclosure ruin your credit rating, but losing your home is never a good thing and it can be very hard to find a good place to live if you have gone through a foreclosure. Fortunately, there are some options that can help you deal with this critical situation with ease. Getting a foreclosure notice doesnt mean you have to lose your home.
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