Many homeowners are struggling to pay their mortgage due to this economic crisis and are currently in risk of losing their homes through foreclosure. One major reason why this is happening is because so many people around the United states have been let go from their jobs and are currently unemployed. One of the main questions asked by these homeowners in this time of need is “whats rights do we have while we are currently facing foreclosure?”
The reality is, unfortunately you as the borrower will have very little rights while going through foreclosure. Depending on your states specific foreclosure laws will have a great affect on what rights you truly have as the homeowner of the property. The main laws set forth during the foreclosure process by your lending company are typically just time frames and a process of notices that must be sent out before the foreclosure can actually take place. If you study hard to completely understand your states specific laws and the time frames set by them, you will have a much better idea on how to go about the foreclosure process.
Once you have completely stopped paying your mortgage payments and after a certain amount of time (usually about 90 days) your mortgage lender will then go about the foreclosure proceedings. The first step in the foreclosure process (depending on your state) will be the filing of a Notice of Default (NOD). Once filed your lender is required to provide you with a copy of this notice. But don’t be too freaked out when you receive this notice because you may still have a chance to contact your lender to workout a solution for your situation such as a loan modification, short sale, or possibly even a deed in lieu. If you and your mortgage lender cannot work out an agreement of some sort you still have the right to pay back all missed payments, late fees, and penalties to bring your loan current once again.
Here are some important factors to keep in mind while in the foreclosure stage:
If you simply pay off the past due amounts or call your lender for a loan modification this may be all you need to stop the foreclosure. But not always, remember the foreclosure process continues until you have completely resolved the situation. Even homeowners who have been working on a potential modification for months will often time still get foreclosed on. Unfortunately, many of these homeowners were under the false impression that the foreclosure will stop once they apply for a loan modification. Once again its not over until its over!
In most states there is what is called a “right of redemption.” This is a right you as the homeowner have to legally buy your home back even after the property has been foreclosed upon. Typically, depending on which state you are located you will have about six months to a year to do so. However, sometimes there is just no way around foreclosure depending on how far I the process you may be. So therefore by studying and understanding your rights as the homeowner, your experience throughout the foreclosure process may be much less stressful and may even result in you saving your home for you and your family.
My name is Maurice “Moe” Bedard. I am the founder of America’s #1 Mortgage Forum, LoanSafe.org. My online work has been featured in the New York Times, LA Times, Fox Business, and many other media publications.