June 30, 2023
Foreclosure happens when homeowners are no longer able to make their mortgage payments and the lender takes back ownership of the property. And while it’s a daunting, overwhelming prospect for homeowners, it may not be a hopeless one.
If you’ve fallen on hard times due to job loss or other unforeseen circumstances and are concerned you’re headed toward foreclosure, being proactive is one of the most essential steps you can take.
The exact foreclosure process varies from state to state, but there are a few generalities you can expect. Typically, the lender starts sending foreclosure notices three to six months after the first missed payment.
Here’s how it breaks down:
Even if the foreclosure process has started, you can stop it from progressing further if you take swift action.
“There are often many options a homeowner does not know about when they are facing foreclosure and in most instances foreclosure can be avoided if the consumer is proactive and reaches out to their mortgage service to explain their hardship,” advised Thomas Showalter, founder and CEO of Candor Technology.
If you’ve missed some payments or are in the preforeclosure phase, the best course of action is to quickly work with your lender to determine the best option to stop the foreclosure from happening.
While each of these options may present some challenges, they could offer the chance to stay in your home and get back on track with mortgage payments.Mortgage forbearanceLoan modificationGovernment assistance programsDeed-in-lieu of foreclosureShort saleLegal actionBankruptcy
Foreclosure may feel like the only option, but there are resources available.
First, there are ways to negotiate with your lender. As mentioned, the most essential part is to contact them early when you’re first experiencing trouble with payments.
Note that lenders have a legal obligation to help with loss mitigation. This means they must provide notices and give ample time for response. It also requires your servicer to work with you to review your options. To do this, you have to fill out a loss mitigation application with the lender, which they have 30 days to respond to.
There are numerous counseling services available, too. The Department of Housing and Urban Development (HUD) is a government agency assisting homeowners through counseling free of charge. The goal is foreclosure prevention by going through the options available to you and making an informed decision.
Unfortunately, there are numerous scams targeting those who are in a vulnerable or panicked financial situation. These scams may pose as lenders offering relief, or even use wording or logos that look similar to government agencies — but they are in fact scammers.
Look for warning signs that you’re dealing with a scam, including when a company or individual:
If you are unsure if you are receiving information from a scammer, you can always call your lender and ask them to verify the mailing or solicitation. You can also call a HUD-approved housing counselor and they can offer assistance.
Candor Technology Contact
Gaffney Austin LLC