Stop a foreclosure before it's too late.
Find out what your options are when faced with a foreclosure
If your home is at risk of foreclosure, read this article to find out what your options are. We help homeowners just like you keep their homes and access equity.
"Every problem has a solution. You just have to be creative enough to find it."
While it might seem frightening, there are several ways to stop foreclosure.
This article will discuss all your options to help better understand which route to take.
Falling behind on your mortgage payments will eventually lead to a foreclosure.
What is a foreclosure?
Foreclosure is a process in which a lender (mortgage company, bank, or investor) repossesses borrowers' home or property due to missed payments. The lender will then place the home or property back on the market to recover some of the lost capital.
After three months of non-payment, your mortgage lender or bank will have the legal right to evict you from your home.
It is important to remember that your mortgage needs to be fully paid off to have full ownership of your home. Missing mortgage payment could put you at risk of losing your home.
If you have received any collection letter from your mortgage lender, you should take them seriously. If you can't make your payment, contact your lender to see what options you have available.
However, if your lender has already given you a grace period and or does not want to restructure your mortgage terms, you still have options.
"You can not fake time."
Depending on how long it's been since your first foreclosure notice, your options may be limited.
Once you have reached 90 days of non-payment, your lender will send you a Notice of Default (NOD).
This notice gives the borrower twenty-thirty days to cover the cost of any miss payments, late fees or appear in court. If the borrower takes no action within the twenty-thirty day period of the NOD, the Foreclosure process will continue as scheduled.
Depending on your state laws, the amount of time you are allotted to bring your payments up to date or appear in court will vary.
If no action is taken after the NOD notice, your lender will send a Notice of sale (NOS).
The notice of sale may be a certified letter stating the date on which your home will be put up for a foreclosure sale (auction). Depending on your state laws and lender, a foreclosure notice may be filed with the county clerk in your area. Your home might get published in local newspapers and or posted on public sale and auction platforms.
In addition to losing your home, a foreclosure will have a catastrophic effect on your credit, hindering your ability to take out loans.
Contact us for foreclosure assistance.
How to stop a foreclosure during Covid-19?
Try to bring your loan current (Cure)
File for bankruptcy
Modify your loan agreement
Deed in lieu
Sell your home
Bring your loan amount current. Cure your foreclosure
Bringing your loan amount current is the ideal option to take; however, it may be difficult for most borrowers to do if they have been in default for several months.
You don't need to sell other assets to come up with the sum of money required of you.
While this might help you make your payment, it may hinder you from making a living. There several ways to help you get caught up, such as a forbearance or assistance from a private investor. We will discuss further options available to you.
File for bankruptcy
When filing for bankruptcy, you have two options: Chapter 7 and chapter 13 bankruptcy.
Chapter 7 bankruptcy allows you to halt the foreclosure process; however, it does not guarantee that you will be able to keep your home permanently.
Chapter 7 bankruptcy is a liquidation process in which assets are used to pay off debt. It does not involve repayment of the debt as opposed to chapter 13.
Filing for Chapter 13 bankruptcy will allow you to stop the foreclosure while staying in your home without any risk of eviction. Chapter 13 bankruptcy is also referred to as a restructuring or repayment of all debt you owe. Under chapter 13 bankruptcy, all your debt, including your missed mortgage payments, will be compiled into one monthly payment over the time period of three to five years.
Modify your loan agreement
Even while you are at risk of foreclosure, you can always reach out to your lender to negotiate the terms of your loan agreement. Even though your lender has been sending you letters for months concerning your late payments, it never hurts to ask for a loan modification. If your lender can not be reached or does not want to modify your loan agreement, there are still options out there for you. We help homeowners bring their loan amount current while facing foreclosure.
Give us a call. We can help you stop the foreclosure, stay in your home, and give you cash back on your home's equity.
A forbearance allows you to pause your monthly mortgage payments for up to a year. If used properly, a forbearance can give you the necessary breathing room to get your finches back on track and avoid foreclosure altogether. If used improperly, you can put yourself at risk of another foreclosure. While under forbearance, it is important to remember that every payment you decide to skip will add up and along with any interest accumulated over the time of your forbearance. All missed payments and interest will have to be payback at the end of your forbearance period either in full or in a higher monthly payment. It is important to keep making payments while under forbearance. Even if it is less than the payment amount, this will keep you from falling further into debt and avoid another foreclosure.
Give us a call to learn more about forbearance. We offer a two-year mortgage forbearance period.
File a lawsuit
If you face a nonjudicial foreclosure, your lender uses a foreclosure process that does not involve the court system. You have the legal right to file a lawsuit against your lender. A lawsuit will stop the foreclosure temporarily until the court reaches a judgment.
Filing a lawsuit can halt the foreclosure or permanently stop the foreclosure if the judge declares that your lender did not have the legal right to foreclose your home.
When filing a lawsuit during your foreclosure proceeding, make sure you have sufficient evidence to prove your case.
You should be able to prove that your lender has missed their authority. You should be able to provide adequate evidence that your lender has disobeyed the homeowner's bill of rights or any state regulations concerning your foreclosure.
In some states, foreclosures are primarily or only handheld in a judicial fashion; however, every state has the right to file for judicial foreclosure.
A judicial foreclosure is a process in which the lender files a lawsuit against you to foreclose your home. Once this happens, you will be notified.
Even at this stage in the foreclosure process, you can reach out to your lender and try to settle (it's best to seek legal advice once you have been notified of a judicial foreclosure).
A settlement will prevent the judicial foreclosure from proceeding any further.
However, if no agreement is made between you and your mortgage lender, the judicial foreclosure will proceed. At this point, you should seek legal advice if you have not done so already.
You and your attorney will need to present any evidence you have stating that your lender has no legal precedent for judicial foreclosure.
The judge will review the evidence submitted by both parties and decide whether the foreclosure is to continue or not. If the judge decides in favor of the lender you may be required to pay a Deficiency of judgement after your home is auctioned.
A Deficiency of judgement is the difference in price between the sale price of the foreclosed home and the loan amount owed.
One advantage you may have as a homeowner during a judicial foreclosure is time.
In some cases, a judicial foreclosure can take up to a year to be settled.
The amount of time it takes for the proceedings to take place allows you to stay in your home, build up your case and finances until a decision by the court has been reached.
We have a team of experienced legal professionals. Give us a call so we can help you stop the foreclosure.
The list below outlines all the states in which foreclosures are typically judicial.
Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana , Maine, maryland, Massachusetts, Nebraska , New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma ,Vermont, Pennsylvania, South carolina
Deed in lieu
Deed in lieu of foreclosure means both you and your mortgage lender come to the understanding that you can not make the payments. In this case, the lender takes complete ownership of your home. A deed in lieu agreement will stop the foreclosure process; however, your home will still be put up for sale.
Unlike a foreclosure, a Deed in lieu is a mutual agreement from both the lender and the borrower. The borrower will not have a foreclosure on their record since they willingly surrendered the home in good faith, and the lender does not have to worry about the borrower taking revenge on the home during foreclosure or spend any more time with foreclosure proceedings.
Depending on how much your debt exceeds the fair market value of your home, your mortgage lender may not agree to Deed in lieu; however, it is worth a try.
Sell your home
Finding a cash buyer for your home will completely stop the foreclosure. If you manage to sell your home at a price that will cover your debt, your lender will leave you alone. When selling your home during a foreclosure, you have a limited amount of time.
You need to find a genuine cash buyer and avoid "tire kickers". You don't have time to waste showing your home to someone who needs to talk to the bank. Your home should be ready to sell as it stands, and the buyer should be prepared to purchase the house once he or she has seen it.
There are plenty of cash buyers out there who will pay you on the spot for your home. Selling your home during a foreclosure will keep you from having a foreclosure on your record. You will have a much easier time getting a home loan in the future as your credit will not get destroyed.
Call today to learn more.
When is it too late to stop the foreclosure?
For a nonjudicial foreclosure
Once the twenty-30 day period stated in the NOD (Notice of Default) had ended. After this period, you will receive a NOS (Notice of Sale) from your lender. This statement will say when your home will be put off for auction.
For a judicial foreclosure
It will be too late in a judicial foreclosure to stop the foreclosure once the judge has ruled in favour of your mortgage lender.
State laws on foreclosures vary. Some states only use Judicial foreclosures while others use both. It will be clear how your mortgage lender chooses to foreclose your home based on the notices you receive.
Can you stop a foreclosure once it starts?
The answer is yes.
You can most certainly stop a foreclosure once you have received notice of it. However, it would be best if you took action to stop the foreclosure once it has begun. You only have a limited amount of time to stay in your home during a foreclosure. As we discussed in this article, there are multiple avenues you can take to stop the foreclosure process, but they all require you to take action.
We can help guide you through the process of stopping a foreclosure. We have helped thousands of Americans stay in their homes, unlock equity out of their home, and find a new home.
You can stop a foreclosure. Give us a call, we will guide you through it.
Meet the Team
Kato general is comprised of experienced investors and real estate professionals. Our goal is to provide a mutually beneficial outcome for stakeholders, partners, and most importantly, our clients.
The collective experience we share gives us the knowledge to guide our clients through the most challenging circumstances. We have decades of experience in lending and mortgage, entrepreneurial startups, real estate investment, title, and legal.
Our diverse background has allowed us to form creative solutions for our clients.