When you take out a mortgage to buy a home, your plan is to never miss a payment and live in the house until you pay off the mortgage or sell the property to buy another home. So what happens when the plan goes awry and you miss payments? You're at risk of losing your home to foreclosure, obviously.
However, foreclosure doesn't happen like flipping a light switch. In judicial foreclosure states the foreclosure process is long and filled with legal procedures that most homeowners aren't familiar with and don't understand.
It can be hard to tell when you're fighting for a lost cause, and when you should keep fighting, and how. Here's a look at some of the things that happen, and how to tell if you could still keep your home when they happen.
When It's Not Necessarily Too Late (But Might Seem Like It)
If you fall behind on your payments.
Failure to perform on your mortgage loan by making payments is the reason that foreclosure happens. However, in order to lose your home to foreclosure, the legal process that happens after you default has to play out. In judicial foreclosure states that can take 1,000 days or more on average.
After missing payments you may be able to reinstate your loan by paying your lender for the missed payments plus fees and interest. Or you could apply for a loan modification to change the terms of your loan and return it to normal servicing. Falling behind on your payments does not mean that foreclosure is certain or imminent, but it does mean that you'll need to take the right actions to avoid it.
When your loan modification application is denied.
Denial is a part of the loan modification process, and does not necessarily mean that you should give up. You can appeal the denial and apply again. It may be that you just need to make a minor change to your application to get approved. And if you're denied the government's HAMP modification, you can apply for an in-house modification.
When you're served a summons and complaint.
Being served a summons and complaint means that your lender is officially trying to foreclose on you. You're now the defendant in a civil lawsuit. You have the right to answer the summons and complaint, dispute the charges, and raise any number of defenses and affirmative defenses. It's time to fight whether you want to keep your home or just draw out the process to give you some more time.
When you have a sale date.
When your home has a scheduled sale date, things are very serious, but it's not necessarily the point of no return. It's possible to adjourn (reschedule) a sale date or stop it entirely. Homeowners in New Jersey have two statutory rights to adjourn a sheriff's sale for 14 days for any reason. All you have to do is pay a small fee and the sale is adjourned.
Your lender isn't supposed to move forward with foreclosure when you have a loan modification application under review, which is called dual-tracking. Pointing this out to the court can stop the sale date.
When You Can't Save Your Home
When you don't have the income to afford the property.
If you have enough income to afford your mortgage, you may be able get a loan modification and keep your home. It could take a lot of time and effort, but it's possible. However if you don't have enough income, your lender is not going to help you keep a home you can't afford. If you're in this situation, you should consider an alternative to foreclosure, such as a deed in lieu of foreclosure agreement or short sale. These options are preferable to foreclosure, and some alternatives even provide homeowners with cash to relocate.
When you've received a writ of possession.
A writ of possession is a court order that the sheriff will place on your door letting you know that you have 1-3 days to leave your house after it's been sold at auction or repossessed by the bank. You may be able to file an emergency motion to stay the writ of possession for some extra time to move out, but your home is already lost at this point.
The Importance Of Getting Good Help
How you respond to your mortgage problems after falling behind on your payments can affect your life for decades. Unless you're an expert on foreclosure defense and loan modifications, you should seriously consider hiring an experienced attorney to assist you. A good law firm with a record of helping people in your situation can help you get the best result and may be more affordable than you think.
Above are just a few of the things that happen after a homeowner defaults on their mortgage payments. You can download our free foreclosure timelines for your state: Pennsylvania, New York, New Jersey, Florida, and Illinois.
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