Can Foreclosure Process Be Stopped?
Yes foreclosure process can be stopped. There are various ways to stop foreclosure, depending on your particular situation.
Obviously you can always stop the process of foreclosure by paying off what you owe. But unless your situation has turned around completely or you won the lottery, this most probably will not be your option There are two types of foreclosure: - Judicial foreclosure - Judicial foreclosure is practiced in most states. This process of foreclosure is done through the court system.
- Power sale - Power sale is permitted in many states if the mortgage includes a power of sale clause . Power sale is executed directly by your lender. You will be served with a notice of default (NOD) from your lender. You will be given a period of time to pay what you owe in full. If you can't pay, a temporary deed of trust will transfer your property title to a trustee. The trustee will set a sale date to publicly auction your property on behalf of your lender. This process usually takes less time than the Judicial one.
Foreclosure process explained:
One to three months after you stopped paying your mortgage, you can expect a letter of acceleration from your lender asking you to pay your past due mortgage payment. If you did not pay your lender will file an NOD. This is the case in normal economic times. In today's market conditions, there are people who still live in their home a whole year without paying. Once the NOD is filed, you will be notified by registered mail with the notice. From the time you get the NOD (notice of default) you are given a time frame to cure the default in full. Partial payments will not be accepted at this point. From NOD to Sale date:
How long does a foreclosure process take? First you must receive a notice of default. If you did not pay what you owe in full, in the time period you were given, your lender can request a sell date from the court. Depending on your location and how busy the courts are the sale date can be set between 3 months and a year after the NOD was issued. After the sale:
How long can I stay in my home after it has been sold? This period varies from state to state and depending whether or not your state has a period of redemption after the sale (See the foreclosure law page). However, usually it does takes from a week to a month before your lender gets a confirmation of the sale and requests possession of the property from the court. An order is then sent to the sheriff and you usually have between 2 weeks to a month before the sheriff shows up at your doorstep. At that time you will have to leave.
Avoid the embarrassment! Ask me how to stop your foreclosure process now! Will foreclosure put an end to my mortgage debt?
In most cases it will. However if your home sales for less than what you owe on it, two thing may happen. - Your lender may make a deficiency judgment against you for the difference between what you owe and what the house was sold for.
- In the event you have an unpaid equity line of credit your lender may go after you for it.
- The IRS may come after you for for income taxes on the difference between the auction price and the debt. This is called Phantom income tax.
Foreclosure and Bankruptcy:
Bankruptcy will become the only solution in regards to the above scenario.
For more information on Bankruptcy and foreclosure, see the foreclosure and bankruptcy page How to stop the foreclosure process: - The best way so far is to negotiate a loan modification to lower your monthly payments and interest rate.
- Short sale is another good way to go about it but it will damage your credit just as foreclosure will.
- Cash for keys or Deed in lieu. You can negotiate with your lender to return the property in good condition in exchange for cash. Your lender may help with your moving expenses etc.
Knowledge and timing are your best tools to stop the foreclosure process and keep your home.
Call me with any questions you may have. I have been through the process of foreclosure I know how you feel.
Return from foreclosure process to home
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