Most homeowners miss a mortgage payment every now and then. But as long as the missed bills are paid within a month or two, there is no reason to worry. However, when a homeowner is unable to pay their bills for months at a time, things become a little more complicated. Eventually, neglecting to pay your mortgage payments could result in the foreclosure of your home.
Of course, this is the worst-case scenario, but also a very real possibility if you suddenly find yourself in the position of being unable to afford your monthly payments. Continue reading to learn more about precisely what foreclosure is, as well as whether it is likely that your home could be foreclosed in the future.
What is foreclosure? Well, essentially, a house risks the possibility of falling under foreclosure when a borrower is unable to continue affording the monthly payments of their mortgage. In addition, if a homeowner does not pay HOA fees or property taxes, they likewise face the chance of foreclosure of their home.
The overall purpose of foreclosing a home is for the mortgage lender to attempt and recoup as much money as possible. When a homeowner applies for a mortgage, they agree to the terms of taking out a secured loan. In order to guarantee that the borrower repays the loan given by the lender, the borrower’s house is collateral.
If a homeowner misses consecutive payments and they do not have enough cash to satisfy the lender, foreclosure begins to seize the home for collateral.
However, while filing out closing documents, homeowners are made aware that the lender has every right to foreclose on their home if they do not follow through with payments. Therefore, this is a risk that all homeowners take when purchasing a home.
One must remember that foreclosure does not happen overnight. Rather, there are several steps that must occur before a homeowner loses their property. However, a foreclosure always begins with missed payments.
Typically, the lender attempts to collect the missed payments after at least three months have gone by since the last time you’ve submitted a mortgage payment. At this point, the lender will likely file a lawsuit in court and issue a public notice stating that legal action will take place if the homeowner does not agree to resume payments.
If you do not act immediately and submit the required payments following the public notice, then foreclosure begins, and you will have 90 days to come to an agreement with the lender. Your options are to sell your property and collect equity to pay off the loan, sign over the deed to your lender, or pay the entirety of the outstanding balance for your loan.
While losing your home is the worst-case scenario, it may be the only way to avoid further legal issues as a result of substantial debt. The best way to avoid foreclosure is to not agree to a mortgage that could be unachievable in the future. Also, never miss a payment for more than two consecutive months.
None of the options that involve losing your home uphold your best interests. That’s why it is so important to seek assistance from a lawyer.
An experienced lawyer can help you understand the complex and confusing process of foreclosure. They can make you aware of any potential solutions in the form of repayment plans that fit your unique situation. Above all, do not give up hope. You have worked hard to achieve your home. Now you must work equally hard to keep it.
There is nothing more stressful than the possibility of losing one’s home. Therefore, if you are facing this situation, do your research, discuss viable options with your lender, and, when in doubt, contact a lawyer specializing in foreclosure litigation.
At Parker & DuFresne, we believe that bankruptcy is a chance for our clients to start on a clean slate to rebuild their lives—and their finances. We work in bankruptcy, foreclosure defense, family law, personal injury, and consumer protection. Our lawyers have quality education and experience in multiple types of bankruptcy.
We have a specific focus on chapters 7 and 13, and foreclosure defense, which are most commonly for individuals. Visit our website at https://jaxlawcenter.com/ or call (904)606-9069 for a free consultation.
It’s important to hire an experienced foreclosure attorney when you’re facing foreclosure, or even if you are experiencing these warning signs.
This is because there are many different types of bankruptcy. Only an experienced lawyer will know which one would work best for your specific situation.
It might seem like it makes sense to do this yourself. But most people don’t have the time or patience to understand all of the details involved in bankruptcy. That means they make mistakes by not choosing the right type, or by not filling out paperwork correctly. Both things could lead to delays and ultimately hurt your chances of getting any debt relief at all.
This is not a journey to take lightly, but it is also not one to take alone. If you need to file for bankruptcy, reach out to us today to start your journey with us.
If you want to learn more about the options you have, call The Jax Law Center for a free consultation.
Parker and DuFresne