Frequently
asked questions
1.
What is foreclosure?
2.
What is the foreclosure process and how long does
it take?
3.
I've missed a few mortgage payments, now what happens?
4.
I received a foreclosure notice, what should I do?
5.
Do I have any options and if so, how much time do
I have to exercise my options?
6.
How do I know if I qualify for any foreclosure alternatives?
7.
Why shouldn’t I just
file bankruptcy?
8.
I get letters and notices from people claiming they
can help me save my home - are they for real?
9.
I would rather sell my home than lose it to foreclosure
. . . is this possible?
10.
Can I just walk away? I don't want to keep the house
nor bother with trying to sell it. What would happen?
11.
What happens when they foreclose?
12.
Can they sell my house for less than what I owe?
13.
If I'm evicted, how many days notice do I get?
14.
What actually happens during an eviction?
15.
How long does the eviction process take?
16.
What's the difference between a foreclosure and
a sheriff's sale?
1. What is foreclosure?
The legal process that a bank or mortgage company uses to force the sale
of your home to repay a debt; usually the mortgage on your
home. Even if one payment is missed the lending institution
can take the property back and then sell it to repay the
money owed them. Typically, a foreclosure notice is filed
after three or four payments are missed.
return to top...
2. What
is the foreclosure process and how long does it take?
Each state governs the foreclosure process differently. As a minimum, the
law requires that the borrower receive sufficient warning
or notice before the foreclosure can take place. Other rights
and responsibilities may be outlined in the mortgage or
loan documents you signed when you purchased the home.
return to top...
3. I've missed a few mortgage payments,
now what happens?
Foreclosure may occur. This is the legal means that your lender can use
to repossess (take over) your home.
When the actual foreclosure happens you must move or you'll be evicted anyway.
Also, you may still owe the lender if they sell the house
for less than you owe. You do have several options but because foreclosure or a deficiency
judgment could seriously affect your ability to qualify
for credit in the future, you should avoid it if all possible!
return to top...
4. I received a foreclosure notice,
what should I do?
- Contact your lender immediately,
explain your situation and why you are having trouble
making your payments. Provide them with your monthly income
and expenses . . . be honest! Do not not ignore the letter!
- Do not move out of your home!
If you do, it may be considered abandoned and cause you
to not qualify for assistance.
- Contact a HUD-approved housing counseling
agency. They have information on services and
programs that could help you including credit counseling
- - usually free!
- If
you bought your home with a Veterans Administration (VA)
guaranteed loan, see our Veterans Services for
more information or call the VA office nearest you.
return to top...
5. Do I have any options and if so,
how much time do I have to exercise my options?
You have several options available to you as long as
you own your home. Once your house is sold, whether by you
or through foreclosure, many of your options are no longer
available.
Knowing what your options are, you are in a much stronger position to deal
effectively with the foreclosure process. Once the foreclosure
process has begun, if you're armed with the right information,
you may be able to save your home from foreclosure and,
in some instances, avoid the foreclosure process altogether.
return to top...
6. How do I know if I qualify for any
foreclosure alternatives?
A housing
counseling agency can help you determine which,
if any, of these options may meet your needs. You should
also discuss the situation with your lender
return to top...
7. Why
shouldn’t I just file bankruptcy?
Avoid if possible.
The Price you pay?
Aside from the attorney fees of up to $1500.00, and
appearances in court, bankruptcy is not a pleasant experience.
The filing becomes a matter of public record and the mark
stays
on your credit file for 10 years. The mark proclaims to
the world,
"I had to rely on the court's protection from my creditors.
I was
unable or unwilling to find another solution." This
is why lenders
are concerned when they see this notation. It makes borrowing
in the future a bigger challenge and rates are higher for
as long as
they hold it against you. You should retain the services
of a competent Bankruptcy attorney.
return
to top...
8.
I get letters and notices from people claiming
they can help me save my home - are they for real?
When foreclosure documents are filed they become a matter of public record
and many people review these records for various purposes
such as compiling lists to sell to bankruptcy attorneys,
investors, real estate professionals and other people interested
in either purchasing your home or . . . helping you save
it.
First, you must decide what you to do, keep your home or sell it, and then
whether or not you want to save your home yourself or hire
an attorney or other service to help you.
return to top...
9. I would rather sell my home than
lose it to foreclosure . . . is this possible?
Yes! It's called the Compromise Sale or the "Short Sale" and a
foreclosure notice does not prohibit you from selling your
home as long as you own it. However, you must act quickly
and select the right real estate professional, one well
versed in these type of sales.
return to top...
10. Can I just walk away? I don't
want to keep the house nor bother with trying to sell it.
What would happen?
There is a legal process for walking away from your home or forfeiting your
property. You should seek the advice of an attorney and
a real estate professional well versed in this area because
you could face catastrophic consequences if you just walk
away.
return to top...
11. What happens when they foreclose?
While the actual process may vary from state to state, the Trustee announces
the sale, informs the public who the lending institution
is, who the borrower(s) is (are), the amount of overdue
debt, and your total indebtedness.
Then the trustee opens the bidding, (your lending institution may also open
the bidding). Either someone purchases the property or it
reverts back to the lending institution. Once the property
is sold or reverts back to the lender, the eviction process
begins!
return to top...
12. Can they sell my house for less
than what I owe?
Yes! Banks are not in the business of owning or selling homes and they do
not like to foreclose on property because it's expensive
and they usually lose money. They must prepare the home
for sale, hire a real estate agent to sell it, and until
it's sold, it remains a non-producing asset on their books.
The lending institution would rather take a loss on the
home than have it remain on their books as a non-producing
asset.
However,
if they sell it for less, the balance is called a deficiency
and your bank can use whatever means they deem necessary
to collect the outstanding balance. Most states treat this
as an unsecured debt (just like credit card debt) and give
the bank (or creditor) the same legal rights to pursue you,
usually by suing you in court.
return
to top...
13. If I'm evicted, how many days
notice do I get?
Typically you'll get 3 days notice! Most banks will start the eviction process
immediately after the foreclosure process but the FHA and
VA are slower. If you own rental property, your tenants
will normally be given 30 days notice. If you need more
time than given, contact your lending institution immediately
to ask for an extension.
return to top...
14. What actually happens during
an eviction?
This varies by state but generally it follows one of two paths . . .
First path:
1.
You
receive a notice to vacate the premises within 72 hours.
2.
You
leave within the time limit.
Second path:
1.
You
receive a notice to vacate the premises within 72 hours.
2.
You
fail to leave
3.
The
bank or new owner goes to court to ask for a hearing to
decide if and when you should be evicted.
4.
At
the hearing the judge decides whether or not you should
be evicted and if evicted, how long you can stay before
moving out. (offering to pay rent will often sway the judge
to grant you more time)
5.
If
the judge decides you are to be evicted, most states allow
you 10 days to appeal the decision.
6.
Once
the court orders your eviction and you have not moved out
by the court designated date, the bank or new owner may
obtain an execution of the eviction judgment which gives
the sheriff the right to physically remove you from the
premises.
7.
The
sheriff gives you between 24 to 72 hours (depending on your
state) notice to move.
8.
You
still refuse to move so, the sheriff physically moves you.
(resist now and you face being arrested)
9.
Anything
left in the house is packed and moved into storage. (to
get your stuff back you'll have to pay the storage fees
and any additional associated fees)
10.
The locks on your former
home are changed.
return to top...
15. How
long does the eviction process take?
The national average is 8 weeks from the day you are given the eviction
notice until a sheriff shows up to move you. It could take
six months or more but . . . be prepared because it could
be as soon as a week!
return to top...
16. What's
the difference between a foreclosure and a sheriff's sale?
Foreclosure sales are auctions held by the mortgage holder while a sheriff's
sale is held by a lien holder or attaching creditor.
return to top...
