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Foreclosure Lawyer

You may be going through a rough financial life in your life and foreclosure may seem like the only option. But it does not have to be that way. There are legal options at your dispense that you can use to avoid losing your house. After all, houses are the most important investments most individuals make in their lifetime. The best way to deal with foreclosure is by hiring a legal expert. Foreclosure attorneys can help you avoid losing your home and can protect you from being exploited by mortgage companies and lenders.

What Is Foreclosure?

Foreclosure law or foreclosure is the legal process wherein a lender or mortgagee takes ownership of the mortgaged property from the borrowers who fail to pay their mortgages. Typically, the lenders sell the property to recover the loan that was paid to the borrower. In case the mortgage company fails to recover the loan balance, the borrower can be personally held liable for the difference besides being evicted from the house.

Foreclosure is a process that comes into the picture when you loan money from a lender to buy real estate. When you sign the agreement you agree to use the property as collateral that can be taken by the lenders or mortgagees in case you are in a breach of the agreement made with them. Generally, defaulting payments or a failure to pay premiums triggers the initiation of the foreclosure process. However, the process can also be initiated if you fail to meet other terms of the loan agreement.

What Happens in a Foreclosure?

The lenders initiate foreclosure after three to six months from when you first default on your payment or when you breach the mortgage agreement in some other way. Foreclosure proceedings vary from state to state but there are two types of foreclosure procedures followed in most states:

Judicial Foreclosures

Judicial foreclosure procedures go through courts. The process is initiated after a lender or mortgagee files a complaint, also known as a petition, with the court. You come to know that a foreclosure has been initiated when you receive a copy of the complaint. The court will then give you a specific period to respond to the complaint. If you fail to file a response the court will grant permission to the lenders to proceed with the foreclosure. If you file a response and the court finds it unsatisfactory then the lenders will still get the permission to foreclose your property. Generally, the foreclosure sale of the property is done via an auction where the foreclosing party and the public may bid for the property. The highest bidder gets the property.

Non-judicial Foreclosure

Non-judicial foreclosure proceedings are initiated and executed without any involvement of the court. All states allow judicial foreclosure and almost half of them permit non-judicial foreclosure. Depending on the state law, a trustee or an attorney completes the following steps on behalf of the lenders:

  • The trustee or attorney sends the borrower a notice of default informing them the time they have to reinstate their loan
  • The notice is then recorded with local land record office
  • If the borrower fails to reinstate or bring the payments current, the attorney will send them a notice of sales which informs the borrower that their property will be sold. Like judicial foreclosure, the property is sold through public auction

The borrower may receive a combined notice of default and sale, only a notice of sale, a posting on the property or in a public place, or notice by publication in a newspaper.

The procedure of foreclosure varies from state to state and based on the mortgage agreement signed between the lender and the borrower.

What Can You Do to Avoid Foreclosure?

Receiving a notice of foreclosure can be distressing and overwhelming. Most people get easily flustered and puzzled about how they could deal with the situation. But the good news is that you have options available to help you avoid foreclosure. Here is what you can do to stop lenders from foreclosing your house:

Loan Modification

One way to avoid foreclosure is to renegotiate the loan terms. You can convince the lender to either give you time to bring your payments to current, forgive the payment completely, spread out the missing payments over a longer time, or change the terms of your loan. However, negotiating with lenders can be difficult.

Deed in Lieu

Signing a deed in lieu of foreclosure means that you will be deeding the property back to the lender. Upon receiving the deed, the lender will forgive the mortgage completely and cancel foreclosure. An important thing to note is that deed in lieu will affect your credit ratings the same way as a foreclosure does.

Refinancing

If you have sufficient equity and meet the lender’s requirements, you can get them to increase your loan limit. This is known as refinancing. Generally, the new terms of the refinanced mortgage come at lower interest rates and better terms and conditions.

Reverse Mortgage

This option is only an option for people who are older than 62 years and own the property. It is simply a loan taken against the property to pay the lender. The unique aspect of a reverse mortgage is that the homeowner is not required to pay the loan until they continue residing and living in the house.

Short Sale

This option won’t help you in retaining your house. A short sale will help you avoid being held liable for the loan balance that they may not be able to recover from the sale of the property. Under the arrangement, you will have to convince the lenders to forgive the remaining loan balance that may be left after the property is sold.

Bankruptcy

Another way you can avoid foreclosure altogether is by filing for bankruptcy. The process will not only suspend all foreclosure proceedings against you but will also give you the time required to repay the debt and retain the ownership of the house.

Why Hire a Foreclosure Attorney?

Hiring a foreclosure lawyer can benefit you in the following ways:

  • A foreclosure attorney will evaluate your case and help you choose the option that is in your best interests.
  • Foreclosure lawyers are experienced negotiators and can easily convince lenders to renegotiate loan terms to help you retain the ownership of your home
  • It is a possibility that the lenders may withhold telling you about loss mitigation options. These options can help you bring your payments to current and avoid foreclosure. A foreclosure attorney will bring this to your notice and help you pursue the loss mitigation option
  • If things come to court hearings, a foreclosure lawyer will identify the mistakes made by the lenders and will use them as defenses to stop foreclosure. Because foreclosure laws vary from state to state and depend on your agreement with the lender, it may be difficult for you to identify the loopholes in the lenders’ procedures
  • A foreclosure attorney will help you file for bankruptcy if that is in your best interest. The lawyer will suggest what type of bankruptcy will best suit your condition. This will give you enough time to bring your payment to current and retain the ownership of the house.

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