Stopping Foreclosure Judgments and Sales
Provided by HG.org
Many homeowners find making mortgage payments difficult when they have families or when work slows down. This then causes complications with the bank, with credit status and housing. If the person who owns the home cannot make the payments, foreclosure may be a guarantee after so many months.
Breaking the payment contract with the lending agency could also lead to other consequences, but the loss of the home is generally the worst issue facing these individuals. However, before foreclosure becomes a certainty and the property may be sold at auction, there are some possible options that may see the homeowner out of the dark.
If the relationship with the lending financial institution has not been ruined, it is possible to apply and obtain a loan modification. This is usually only possible if the homeowner has good credit, collateral and certain special stipulations in the loan agreement permitting this action. If all financial means are closed to the individual, he or she may file bankruptcy. This is drastic, and it will affect almost all other aspects of the personís financial life for many years. In specific instances, it may be possible to file a lawsuit against the lending agency to either stop the foreclosure process completely or to delay it so that enough funds may be garnered in some manner.
Bankruptcy Option to Stop the Foreclosure
One option that may be the last resort is bankruptcy. Filing for this may be the only way to stop a foreclosure of a home, and it could be the only available route to take. However, this path may halt the process of a foreclosure sale immediately. An automatic stay initiates once bankruptcy has been filed. This procedure then causes the lending agency to stop all methods of attempting to foreclose on the property so that it is not sold through an auction or other manner. Unfortunately, bankruptcy may not keep foreclosure steps from progressing for long if the lending financial institution obtains permission to continue with the process. Then, it is only a matter of time before the house continues to the next stage of foreclosure.
There are two types of bankruptcy that may be filed. Chapter 7 buys time for the homeowner, but Chapter 13 may protect the homeowner and permit him or her in keeping the house. This type of filing permits the homeowner to restructure his or her debt and liabilities so that they may be repaid within a three to five year repayment plan created for the individual. This bypasses the foreclosure process and the homeowner is permitted to remain in his or her home during the plan. This could also reduce the mortgage payments and eliminate other debts accrued over time. Even if the person is not able to complete the plan initiated for him or her, there are several more months available after the three to five years in usual situations.
The Loan Modification Option
Before the home foreclosure process initiates, it is crucial to contact the lending agency to inspect any loan modification options available. If funds have become tight currently, it is possible there could be a stipulation or an option to change the payment plan before the mortgage becomes default. This could delay the foreclosure or stop it in its tracks. It may be possible to halt the foreclosure since most lending financial institutions are prohibited in dual tracking which permits the company to continue with a foreclosure even when an application has been started to alter the loan terms. If the changes have been approved by the institution, the foreclosure may be stopped permanently until another alteration is necessary.
Filing a Lawsuit and a Real Estate or Financing Lawyer
There are certain situations where it is possible to start a lawsuit against the lending agency such as when the foreclosure process is outside of the courts. This may delay the process from progressing or stop it entirely by hiring a lawyer and suing the company. However, if the courts are involved, this may not be a possible option. Others have used the courts to sue the lending agency for other issues such as gross interest rates and unreasonable loan payments.
No matter which option is taken, it is imperative that a lawyer is hired. If the situation calls for financial data and the lending agency, a financing lawyer may be needed. However, for most matters involving foreclosure and real estate, a real estate lawyer is necessary for his or her knowledge of the processes and how to sidestep these issues.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.