Foreclosure can happen to you if your lender repossesses your property because you have defaulted on your mortgage or failed to pay your mortgage payments on time. For your lender to repossess your property, your mortgage should be secured by your property. In the event that you fail to stop the foreclosure process, your lender will legally own your property.
The Foreclosure Process
Your lender should send you a notice of default stating that you have been behind on your mortgage payments and that they can repossess your home because of your non-payment. Your lender might likewise place a lien on your property. If you fail to make your payments currents or create a payment plan with your lender, your lender will then start the foreclosure proceedings in which your lender will need to prove that you have defaulted on your mortgage. If your property is foreclosed, your lender will sell it in order to recover their losses. In the event that the purchase price of your property is less than what you owe your lender, you might need to pay the deficiency.
Can I Prevent Foreclosure?
Most lenders want to prevent a foreclosure and will be willing to negotiate with borrowers. According to a top bankruptcy lawyer in Salt Lake City, to prevent foreclosure, you can consider the following:
- Negotiate with your lender to see if you can reduce your mortgage payments or stop making payments until you can begin making payments again.
- Request for a forbearance. If your lender agrees to a forbearance, you can make partial mortgage payments for several months. You do need to prove to your lender that you can soon make full payments.
- Ask for government assistance. Some government organizations enable homeowners to change their mortgage terms and reduce their payments.
- Consider filing for bankruptcy. You should consider this only if all else fails, but it might be necessary if you really want to keep your property. Seek the help of a bankruptcy lawyer from reliable law offices such as Law Office of Davis & Jones, P.C.
Borrowers Also Have Certain Rights
Although your lender can legally force you to repay your loan and foreclose on your home, as a borrower, you have certain protections including:
- Giving notice to the public about the foreclosure sale.
- Equity of redemption. You have the right to pay off your loan’s balance prior to it being foreclosed.
- Bidding for your property at the foreclosure sale.
- Statutory redemption. This redemption right will only apply after the lender has foreclosed on your property. This will provide you a limited time to repay your debt after the foreclosure has been finalized.
- Judicial price supervision. If your foreclosed property sells at a price higher than your debt, you might be entitled to some of the profit.
Foreclosure can be emotionally trying and daunting for anyone. Each state has different laws regarding the foreclosure process. It’s best that you know which laws apply to your specific situation. If you are facing foreclosure, consulting an experienced lawyer can help you assess your case and make sure that your rights are upheld during the entire process.