Foregoing Foreclosure

Foreclosure is a legal process where mortgage lenders can take a home from a homeowner that has defaulted on their loan. Typically, the foreclosure process can last from one to seven months, depending on the state you live in. However, there are situations in which a mortgage lender may begin the foreclosure process after the first missed payment.

ACT QUICKLY

The foreclosure process may vary in length, but your window to fight back is small. You often have limited solutions and must decide quickly to avoid being evicted. Through the foreclosure process, the lender can evict your family while they attempt to sell the home to satisfy the owed debts during the active process. TTypically, the lender will notify the homeowner of the foreclosure and eviction unless the owed payment is received.  If the homeowner does not make the payment within five days, the lender will send a second letter, this time stating that the homeowner has defaulted on the loan and if the payment is not made within 30 days, the homeowner will be evicted. A foreclosure notice is issued to the homeowner if they do not make the payment within the 30 days.

If the homeowner still does not pay, the lender can then demand payment by the end of the month. If the homeowner pays the mortgage by the end of the month, then their home is safe from foreclosure. However, if the borrower does not pay, then the lender can begin the foreclosure process. The lender will pay the homeowner’s property taxes to avoid foreclosure for the first year. Borrowers can take action to avoid foreclosure. If a borrower is experiencing financial hardship, they can contact a HUD-approved counseling agency. The counseling agencies can help borrowers create a loan modification plan to help the borrower pay back the loan. If the borrower can prove that they are experiencing financial hardship, the lender may lower the interest rate on the loan. If the lender lowers the interest rate, the agreement to lower the interest rate will be in effect for five years. If the borrower does not create a loan modification plan, the lender can begin the foreclosure process.

If you are at risk of losing your home to foreclosure, contact our Houston bankruptcy attorney today.