Foreclosure Questions

There are many foreclosure questions homeowners may ask when faced with the possibility of defaulting on their mortgage. Some of the most common are:

What is foreclosure?

If you are in default on your mortgage, meaning that you have fallen behind and show no ability or desire to make up your payments, your property can be taken and sold to repay your debt to the lender. This is known as foreclosure.

What prompts foreclosure proceedings to start?

Foreclosure proceedings can start as soon as payments become delinquent, but most lenders will hold off until the third consecutive payment is missed. Depending on the type of loan you have, foreclosure can start earlier, however. Check your mortgage contract; it should state at how many days past due a Notice of Default will be filed and sent to you.

Who can start foreclosure proceedings?

Anyone who has a vested interest in your property; this includes mortgage holders and other lien holders you took out loans with using the property as collateral.

Can tax liens prompt foreclosure?

Not exactly. If you get behind on your property taxes federal, state or local taxing agencies can take your home and sell it for back taxes - this usually prompts foreclosure as most borrowers will not continue to pay their mortgage on a house they no longer own, and the lender will try to ensure that they have a claim to some of the proceeds from the sale.

How long does the full foreclosure process take?

It depends on the terms of the mortgage, the state you live in, and the type of loan. Usually the time period is between 90 and 180 days, with the average being 120 days. Timeline for foreclosure

Can I stop foreclosure?

Yes! You have many options, including bringing your mortgage payments current and paying up all charges and fees, negotiating a refinance , repayment plan, or loan modification , or even filing bankruptcy to gain time to work out an arrangement with the bank or lender. The key to stopping foreclosure is to correspond with your lender from the first sign of financial instability, and not to ignore letters or phone calls.

If my property is foreclosed on, will I get money from the sale of my home?

Maybe. The remaining amount owed on your mortgage must be paid, and all outstanding property taxes, foreclosure charges and court fees. Usually there is nothing left, and if you live in a judicial foreclosure state, the lender may even file a deficiency judgment against you for the balance due. This commonly happens if your loan is 'upside down', and arranging for a short sale of your property is usually the best option.

Should I contact an attorney? If you really want to save your home… yes. You may be able to get a lender to offer you an arrangement that sounds good, but if you aren't well versed in the law you may end up worse off than before. A lawyer can ensure you are not being taken advantage of during a stressful time, and help answer all your foreclosure questions.

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