Have you fallen behind on your mortgage payments and received a foreclosure notice?
If so, this can be a stressful time for you and your family. But the first thing to do is to stay calm and to consider your options.
You should also keep in mind that there are people across the country dealing with the same thing too.
According to ATTOM Data Solutions, there were 933,045 foreclosure filings in the United States in 2016. This marked a 14% decrease from 2015 and the lowest amount since 2006.
What should you expect when you receive a foreclosure notice?
Read on to learn what it means and how you can prevent a foreclosure on your property.
1. Speak To Your Lender
You should contact your lender to discuss your financial situation and how they may be able to accommodate you.
Be sure that you do not ignore a foreclosure notice. This sends a bad message to your lender and can put a foreclosure into motion faster.
Before you call your lender, you should read through your notice closely. Look for what all is being requested and the timetable for it to be done. By talking with your lender, this shows you are are paying attention to their notice and working to resolve it.
By talking with your lender, this shows you are are paying attention to their notice and trying to resolve it.
2. Consider Your Options
Once you talk with your lender, think about the different options you have when it comes to your next move.
When some people hear the word ‘foreclosure’, they think that it’s something that happens very quickly. But that’s often not the case — especially if you are willing to work through it with your lender.
Some of your options include special forbearance or making a mortgage modification.
You may be a good candidate for a special forbearance if your lender allows you to have this opportunity. This can be an option if you demonstrate an unexpected increase in bills or the loss of a job. In short, a bank will reduce or suspend your payments to allow you to get back on track with your mortgage.
In short, a bank will reduce or suspend your payments to allow you to get back on track with your mortgage.
When your mortgage terms are modified, your lender may extend its term to lower your monthly payments for a longer period of time.
3. Pre-Foreclosure Sale
If those options don’t work for your situation, your lender may allow you to sell your home to avoid foreclosing on it.
But there are some things to keep in mind when it comes to this option.
The appraised value of your home must be at least 70% of what you owe on it. The sale price must also be 95% of the appraised value. These requirements help to protect your lender in this situation.
Your loan must also be at least 2 months delinquent prior to the closing date of the sale.
4. Facing a Lawsuit
If you can’t come to an agreement on payment terms or your lender won’t allow you to complete a pre-foreclosure sale, you may be facing a lawsuit.
If you are contesting the foreclosure in litigation this can be a costly and time-consuming process.
Your lender will file a complaint, alleging that you are in default of your mortgage and requesting that the court award them the home in question.
You would then have 15 to 30 days to respond to these allegations or risk having your house awarded to the lender by default judgment.
How to Handle a Foreclosure Notice
A foreclosure notice can be a scary thing to receive but it doesn’t necessarily mean you will lose your home.
But it’s how you handle this notice that will ultimately determine the end result.
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