Sometimes a homeowner will fall behind on their mortgage, but they don't actually lose their home to foreclosure for a long, long time. How long? We've had clients who were in foreclosure for 11 years before their case was resolved!
People who stop paying their mortgage but continue to live in their home for years without anything happening can get used to that. Mistake. While at times it may seem like nothing's going on, the wheels are turning.
Some homeowners forget how serious their situation is, and then they get a notice that their home is scheduled to be sold in a foreclosure auction, and they're shocked and unprepared and have few options available to them.
Remember that when you fall behind on your mortgage, your home will eventually be lost and you and your family will be evicted if you can't resolve your default. Don't let it happen to you!
Start Working On A Resolution Early
Rather than getting used to being in foreclosure as if it's going to be that way forever and waiting around for your bank to tell you what's happening, you should take action and start looking for solutions before you're backed into a corner. No matter what you want, it's always better to have more time to work toward it. So what can you do?
Hire An Attorney
One of the best things you can do if you fall behind on your mortgage is to hire a foreclosure defense attorney. As we've said many times before, the bank has experienced attorneys working for them. If you're trying to go up against them on your own, it's not going to be a fair fight.
By hiring an attorney, you can level the playing field and give yourself the best chances of getting the result you want. And again, the sooner you can do it, the better.
Homeowners have been known to wait until their foreclosure sale date is only days away to contact our law firm. Sometimes we can take those clients and file an emergency motion to stop the sale, but with so little time it's harder and there are fewer chances for success. Sometimes we can't do anything for them and don't take their case.
Apply For A Loan Modification
A loan modification is a permanent change to one or more of the terms of a mortgage, such as the interest rate, monthly payment, or principal balance. It's one of the only ways for homeowners in default to avoid foreclosure and keep their home. When you get a loan mod, your mortgage will be reinstated and returned to normal servicing.
Also, if your loan mod application is accepted as complete by your lender at least 37 days before a scheduled foreclosure sale, the sale is not supposed to occur.
Unfortunately, loan modifications are difficult to get and applications are often rejected for being incomplete. And completed applications are often denied, requiring borrowers to apply again. If you wait too long to apply for a loan modification, you won't have as much opportunity to fix any issues that come up, and may have lower odds of getting approved.
Some homeowners have gotten a loan modification but have been unable to adjust to making their mortgage payment again after not paying it for so long, and have defaulted again. Be aware of this phenomenon of payment shock and make sure you are prepared for making your mortgage payment again.
Get Out On Your Terms
There are ways to avoid foreclosure that involve giving up your home, such as a deed in lieu of foreclosure or cash for keys agreement. You can also use foreclosure defense strategies to try to delay losing your home for as long as possible. Those options can also take time, so it would be best to get started on them as soon as possible.
When you fall behind on your mortgage, you need to start thinking about what permanent solutions you want to pursue before your options are limited by time and the legal process. You may stop paying your mortgage and not notice anything significant happen for years. But don't be fooled, you will not be able to avoid the consequences forever. Talk to an attorney and work towards a loan modification or other solution. If you wait too long, you may lose your home when you didn't have to.