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Foreclosure Defense

Mistakes to Avoid If You’re Facing Foreclosure

By November 30, 2022No Comments

The process of going through a foreclosure can be quite nerve-wracking and stressful, and it may even cause you to make poor decisions such as neglecting to take action or taking incorrect action.

Unfortunately, your actions and how quickly you act may determine the outcome of many situations when you face foreclosure. Continue reading to learn of some of the common mistakes you should avoid when you’re facing foreclosure.

Common Foreclosure Mistakes You Could Be Making

Neglecting Servicer Calls and Letters

Notifying your mortgage lender of an impending payment delay is preferable. You’ll likely find a lender willing to work with you to find a satisfactory alternative.

You should also read every correspondence to find out if a lawsuit has been brought against you and, if it has, what defenses you might have. When mortgage payments are past due, the bank will send collection letters. You might receive a number of documents, such as a notice of default and a notice of intent to foreclose. Also, expect correspondence from the bank’s legal department.

If you have options to stop the foreclosure, your servicer will get in touch with you by phone or mail to explain them. It is critical to read everything thoroughly.

Neglecting the Property

When facing foreclosure, most people stop paying their mortgages and neglect their homes, which is a regrettable choice.

This complicates a short sale, the bank’s capacity to sell the property (which might subject you to additional debt even after the foreclosure), and the involvement of a homeowners’ or condo association for violations.

Only a small amount of money should be used to repair an already-damaged home if the owner is facing foreclosure. However, the homeowner should prevent the property from falling into total disrepair if there is still a chance to stop the foreclosure or come to some other agreement with the bank.

Not Seeking Help

Following a missed payment, lenders are required by federal law to wait 120 days before starting a foreclosure. However, the sooner you take action to preserve your house, the more choices you may have.

Contact a knowledgeable foreclosure defense lawyer before you are sued or a sheriff’s auction is scheduled. Many people who are facing foreclosure wait until they receive a foreclosure judgment or notice of an impending sheriff’s sale before taking any action.

You’ll have more flexibility and alternatives if you deal with the situation quickly.

Getting in Touch with the Foreclosure Rescue Schemes

Despite providing official-looking documents and persuasive sales pitches, businesses that promise to stop foreclosure for a fee are typically scammers. Being a bit skeptical when such schemes get in touch with you can be beneficial in the long run.

Depending on Your Lender’s Assistance

Although your lender may be able to assist you, do not depend solely on them. No law requires them to negotiate a loan modification with a homeowner. Often, a lender may create the impression that they would approve a loan modification, only to deny the borrower’s request later.

Not Filing for Bankruptcy

Many people believe bankruptcy should be avoided at all costs due to its negative connotations. However, filing for bankruptcy under Chapter 13 of the United States Bankruptcy Code might be a wise choice.

Bankruptcy Code—this may enable you to keep your home and eventually regain financial stability. In most cases, declaring bankruptcy under Chapter 13 will give you up to five years to keep up with your mortgage payments while you rebuild your financial stability.

If you file for bankruptcy and the court approves a new payment plan that allows you to keep up with both your mortgage and your other obligations, you may be able to avoid losing your home.

Causing Property Damage

Some homeowners turn to vandalism to vent their rage after learning that their banks would be foreclosing on their homes. Despite how you feel, this is not the right thing to do.

If the bank decides to report the vandalism, actions like tearing down walls, removing pipes, dumping cement down drains, etc., may have serious legal repercussions. In addition, as was already mentioned, these actions may increase the amount of money you owe after the foreclosure.

Dismissing the Idea of a Short Sale

Both you and the lender would gain from avoiding foreclosure through a short sale. A short sale occurs when a buyer agrees to pay less than the outstanding amount on a mortgage. You go to the bank to settle the loan and persuade them to accept the amount you are offering. Although this may still have an adverse effect on your credit, it won’t be as bad as a foreclosure, and you’ll avoid having a court order against you.

Not Exploring Government Programs

The FHA Secure Refinancing Program was established by the Federal Housing Administration (FHA) to assist borrowers in avoiding foreclosure on their homes. It intends to meet the requirements of homeowners who have mortgages but cannot pay them back.

This may be because they choose to finance their homes with interest-only loans or because their adjustable-rate mortgages reset and increase their monthly payments. The official website of the FHA has further details about this program that one may access there.

Not Making a Strategy

You may be trying to put off the foreclosure for as long as possible. This, too, is a serious error. You should prepare in advance, including looking for a new place to live and packing up your current one.

If you don’t comply with the sheriff’s requests, he may send a crew of people to your house to remove your possessions. The situation will get much worse as a result of this.

Avoiding Professional Assistance for a Prolonged Period

A foreclosure attorney can assist you in preventing foreclosure and negotiate with your lender to prolong the process or halt the foreclosure altogether. Getting assistance is a smart idea to avoid unpleasant surprises in the court system, such as paying back extra money after losing your home. If you are having trouble paying your mortgage or are already in foreclosure, understand the choices available to you. Contact the knowledgeable, honest, and compassionate lawyers at Vilt Law, P.C. Contact them today to book a consultation.