A foreclosure on a mortgage is a legal step that a lender resorts to when a consumer cannot repay the mortgage loan. The lender forecloses on the property and puts it up for sale to recoup their investment.
If you have fallen behind on your mortgage payments and are facing similar problems, it is time to assess your situation and take the necessary steps to stop the foreclosure that will result in you losing your home.
Judicial and Non-Judicial Foreclosure
It is important to understand the nuances of foreclosure. The process of foreclosure is not the same in all states. There are two types of foreclosure - judicial and non-judicial. The first requires a lawsuit to be filed by the lender, who can take possession of the property only after the suit is resolved in the lender's favor. This process can take months before being completed.
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A non-judicial foreclosure, on the other hand, is something that takes very little time to complete once a default on a mortgage note is made. The lender has to comply with a statutory requirement and file a foreclosure notice. After that, the whole process can be completed in as little as thirty days.
The State of Texas uses non-judicial foreclosure; so as a consumer, you stand to lose your home much quicker, compared to residents of states that have judicial foreclosure.
Do Not Rely on Your Lender's Advice
If you are behind in your mortgage payments, it would be unwise on your part to rely on the advice that your lender may give. What you should do is seek independent legal counsel and file a bankruptcy petition if your situation demands taking this step. Filing bankruptcy can stop the foreclosure proceedings against you and prevent you from losing your home.
By hiring a bankruptcy attorney you will be able to set up a repayment plan as part of a Chapter 13 bankruptcy. If you are able to make the repayments, you are entitled to retain the property.
Once there is a reorganization of your payments, you pay into the plan agreed to in the bankruptcy proceeding, and make repayments to a trustee - who will in turn pay your lender.
When an attorney files a bankruptcy petition on your behalf and serves your lender with the appropriate notice, the lender is required by law to remove the details of your property listed for a scheduled foreclosure sale from the foreclosure docket and has to comply with the Chapter 13 bankruptcy repayment plan.
For example, suppose you have a six-month delinquency amounting to a $3,000 mortgage default. The judge can make a three-to-five-year plan to pay off the $3,000.
This way, you can keep your home.
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