What buyers and homeowners should know about the foreclosure process
A mortgage is a loan, and like most loans, it demands some kind of collateral in case you are unable to pay it back. In the case of real estate, the house or building is the collateral, and so a failure to make your mortgage payments can result in the loss of your home and a grim financial situation. This process is called foreclosure, and it is a terrifying word for any homeowner struggling to repay their loan.
The good news is that there are foreclosure laws in place to help you avoid this worst-case scenario, and with a clear understanding of the foreclosure process, you can be sure to develop a plan of action to overcome the challenges that it brings. If you are dealing with an impending bank or government foreclosure, or are looking to avoid one, your best bet is to contact an experienced foreclosure attorney for guidance and representation.
Mortgage Foreclosure Law
Essentially, foreclosure law permits the lender to take the property as compensation, and then sell it in a foreclosure auction. While the law allows the lender to collect the house if the borrower defaults, the lender must first get the court's permission to do so. If you miss a mortgage payment, you won't automatically lose your house. A foreclosure is a time-consuming and expensive procedure, and so both parties want to avoid it if at all possible. However, the longer you go without paying, the greater the danger; your best course of action is to maintain open communication with your lender, and immediately seek legal guidance to sort out your options and avoid the consequences of foreclosure.
Once the lender applies to the court, the foreclosure process is underway. But you're not sentenced yet—the judge will often give you another chance to pay the mortgage and any associated fees. It follows that the longer the grace period, the better your chances of raising the necessary money, but what's the best approach? It is a delicate subject, and it can be difficult to convince the court that you deserve more time. In this case, a lawyer will offer valuable advice on refinancing your loan or developing a payment plan with another lender that will increase your ability to pay off the mortgage.
The Foreclosure Process
If you're faced with an impending foreclosure, you have a couple of options to make the situation as painless as possible. In some cases, the best idea is to agree to the foreclosure and get out of the debt once and for all, while other situations may be better resolved by selling the house during the redemption period that was granted by the courts. Neither strategy guarantees debt settlement, but an attorney can weigh the advantages and disadvantages to determine the best course of action.
A foreclosure petition is not the end of the road. If you do receive one from your lending institution, contact an attorney as soon as possible. You likely have more options than you think, and an experienced foreclosure lawyer will work to resolve the problem as swiftly as possible, providing proactive legal and financial guidance that may just turn your situation around.