In New York, the foreclosure procedure is complicated. According to www.maccolaw.com/foreclosure-defense, there are so many houses in foreclosure on Long Island that delays in the Nassau and Suffolk Supreme Courts can aggravate homeowners facing foreclosure.
Many people assume they can defend their foreclosure without the assistance of an attorney. Still, costly mistakes made early in the foreclosure process might jeopardize your ability to save your house. To protect your rights during a foreclosure, speak with an attorney.
What Is Foreclosure?
When a bank or mortgage lender takes possession of a property in default, frequently against the homeowner’s will, this is known as foreclosure. Your mortgage agreement stipulates that if you default on your payments, the bank has the right to foreclose on your home.
The foreclosure procedure might be judicial or non-judicial, depending on your state. In some states, you can choose between the two. The differences are as follows:
- The lender files a lawsuit to start the foreclosure process in a judicial foreclosure. The borrower fights the lawsuit in court; if they lose, the house falls into foreclosure and can be sold at auction.
- If the borrowers stop making payments, non-judicial foreclosures rely on power-of-sale clauses in the mortgage or deeds of trust to reclaim the owed sum. The mortgage provision allows the lender to select trustees who can sell the house to pay off the debt. The lender must follow the state’s and the mortgage agreement’s out-of-court procedures to start the foreclosure process. There is no need for a court hearing, and the process is usually quicker than a judicial foreclosure.
How Can I Stop the Foreclosure Process?
There may still be a chance to stop the foreclosure process until your house is slated for auction. The most important thing is to keep in touch with your lender. It’s best to contact your lender as soon as possible. Many people are afraid of phoning their lender and would rather avoid the unpleasant circumstance by postponing it, but this will only harm you in the long run.
It’s not uncommon for people to have financial difficulties. They may ask for proof of hardship or other financial information to help you come up with a plan. Making Home Affordable is one of the government-sponsored organizations that provides counseling and other services.
Options for Homeowners Facing Foreclosure
Here are some options if you are facing foreclosure.
Sell the House
The homeowner is the home’s legal owner until the foreclosure is completed. This means they can sell the house throughout the foreclosure process as long as the sale and payment of the mortgage are completed before the foreclosure auction.
If the property sells for more than the homeowner’s mortgage loan total, the mortgage (with any other lienholders) is paid off, and the homeowner keeps the difference. If, on the other hand, the property is sold for less than the outstanding mortgage loan total, one of two things can happen: The lender can forgive the deficit balance or attempt to collect it from the borrower. State legislation will determine the lender’s possibilities.
File for Bankruptcy
If you’re in danger of losing your home to foreclosure, you can use bankruptcy to temporarily halt the process with an automatic stay.
All collecting actions are placed on hold when an automatic stay is activated. However, the sort of bankruptcy you file will determine whether or not you may keep your home. Bankruptcy is a viable option if you’re willing to lose your home to foreclosure and it has no positive equity.
Redeem the Property
Many states have specific laws that allow homeowners to maintain or “redeem” their homes after it has been foreclosed. This is referred to as the redemption right. When it comes to foreclosure, there are two types of redemptions.
The first is the equitable right of redemption, which all fifty states recognize. This allows you to catch up on missing mortgage payments and pay off any extra interest, penalties, or fees that have accrued.
The second option is the statutory right of redemption, available in roughly half of all states. This process is handled differently in each state. However, you’ll usually have a specific time following the foreclosure sale to redeem the property and repurchase it. This term of redemption can extend anywhere between 30 days to a year.
What you must do to redeem your property is governed by state legislation. You may be required to pay the sale price plus charges and interest in some states. You must pay the mortgage balance plus charges and interest in other states. In practice, the mortgage balance and the sale price are frequently equal.
Finally, you have the option of fighting the foreclosure. The type of foreclosure you’re dealing with will determine when and how you present your defense. You have the right to offer any defenses in a judicial foreclosure.
You may need to file your case in a nonjudicial foreclosure to have the opportunity to explain why you believe the court should intervene and stop the foreclosure. It is strongly suggested to hire a foreclosure attorney to assist you in fighting the lender in a judicial or nonjudicial foreclosure.