If you fail to make your required mortgage payments, foreclosure may occur. Foreclosure is the legal means that your lender can use to repossess your home. It allows the lender to seize your property, evict you and sell your home, as stipulated in the mortgage contract. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. If that happens, you not only lose your home, you also would owe your lender an additional amount. Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. Fortunately, there are steps you can take to stop foreclosure.
Contact Your Lender
Lenders do not want your house. They typically have options to help their borrowers through difficult financial times. Once you realize you are going to have trouble making your mortgage payments, contact your lender and tell them about your financial difficulties. This gives them the opportunity to work with you to create a plan.
Apply for a Loan Modification
One way to slow down and hopefully stop the foreclosure process is to modify your payment plan through what’s called a loan modification (or other foreclosure avoidance option). A loan modification can adjust your interest rate & your payment amount, and extend the time you need to make your payment in. If your modification application is approved, the foreclosure will be permanently stopped so long as you keep up with the modified payments.
File for Bankruptcy to Save Your Home
A Chapter 13 bankruptcy will stop foreclosure dead in its tracks. Once you file a bankruptcy petition, federal law prohibits any debt collectors, including your mortgage lender, from continuing collection activities. Foreclosure is considered a collection activity, and so the day your lender becomes aware that you have filed for bankruptcy, the foreclosure process will effectively be frozen. The law requires your mortgage company and other creditors to work in good faith with you to formulate a reasonable repayment plan so you can get back on track. Always consult with a bankruptcy attorney regarding whether filing for bankruptcy is a good strategy for you.
At Frego & Associates we consider saving someone’s home to be one the most important and rewarding aspects of our practice. If you find yourself falling behind on your mortgage payments, it will be well worth your time to talk to one of our foreclosure attorneys. To schedule a no-obligation visit with an attorney at any of our offices, please call (800) 978-4788 or fill out an appointment request online. The law is there to help you… and so are we!