What Is a Foreclosure – Understanding the Basics
What is foreclosure? When an individual is unable to meet the contractual payment requirements on their indebtedness, the lender can obtain the authority to repossess their property. If this is your position regarding your mortgage, you have a reason to be very worried. First, you will receive a legal notice that a foreclosure mortgage lawsuit has been filed against you. If you are not careful, you might lose your home in a period not exceeding 6 months. Taking the necessary steps on your part might prevent the foreclosure altogether.
You are advised to contact your lender as soon as you know that you will be late for payments, for example, when you have lost your job, when you have been sick and so on. Try to reach a compromise with your lender on how a suitable repayment option can be pursued so as to prevent foreclosure. During this period, it is inadvisable to move out of your home. Immediately contact a housing counselor to shed light on how your situation can be fixed. Beware of people who might want to take advantage of your desperate situation by charging high fees for legal advice or even try to acquire some of your property.
Can foreclosure be avoided?
What is foreclosure mediation? Bringing two conflicting parties voluntarily into a position where they can negotiate and communicate reasonably with one another is regarded as mediation and is facilitated by a mediator. The mediator is usually a person who does not take any sides in the conflict. The neutral mediator works with both parties (lender and mortgage holder) to find a solution to the mortgage issue via mutual understanding. These negotiated agreements can take place severally during the foreclosure process.
The mediation may aim at preventing the process from getting to the court, issuance of a default judgment or prevent the foreclosure sale. Mediators may at times be attorneys who will also tell you everything you need to know about what is a foreclosure. They are not permitted to give any financial or legal advice to any party. They have no authority to give any judgment on the case either. Their purpose is to promote a smooth negotiation between the participants so that they can mutually come to an agreement sooner rather than later.
General overview on the foreclosure process
What is the foreclosure process? Generally every state has its own stipulations and procedural frameworks on what is a foreclosure. When facing this situation, it’s important to get to know the practices and laws that are applicable in your state. The foreclosure proceedings may commence when one misses a single payment, although it is usually not the case. Most lending institutions give a grace period for which they accept late payments. To discourage this, they charge an extra fee on top. This usually happens when one defaults on their payments that they begin receiving phone calls. Most banks will only accept late payments if they will update the loans to their current status. Defaulting on your loan for three consecutive months will compel the lenders to initiate the legal foreclosure process. It is at that time that you will want to know what is the foreclosure process. They might either pursue judicial sale, which involves court action, or exercise power of sale, which involves the defaulter.
The judicial sale
In your search for information about what does foreclosure mean you will find that judicial sale is accepted nationally but not all states allow power of sale. When the payment period ends the judgment made allows the lender to pursue the auction option. For the states that allow power of sale, a clause in the loan papers provides for this method. This latter method is faster than having to go through the judicial route. Whatever the route taken, they all mandatory requirements that involved parties be given notification on the proceedings.
At times, there can be deficiency judgments. This is made when the sale of property of the borrower does not meet the loan amount. The remaining difference can be called for. However, the method at which this amount is calculated and arrived at depends on the state you reside in. There used to be a ‘strict foreclosure’ although it is obsolete nowadays.
What is the foreclosure process? Contact our attorneys today. They will explain everything you need to know and most important, how you can avoid foreclosure.
My name is Craig R. Chlarson. Whether you are seeking to eliminate your debt, typically through a chapter 7 filing, or whether you are seeking to reorganize your debt, typically through a chapter 13 filing, or even if you have basic bankruptcy questions, call me today. I can help you.
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