Owning a home requires a lot of discipline and responsibility. It isn’t uncommon for people to find themselves unable to afford to buy a house on their own, and this is why they go to lenders to start a mortgage plan. This is how most homeowners manage to afford their homes, paying off a small amount at the start, and then having the lenders or banks pay for the rest of the house.
Mortgage repayments happen monthly, and when people can’t keep up with these payments, their houses may be up for foreclosure. Read on to learn more about this and how you can protect your home from foreclosure.
What is a Foreclosure?
A foreclosure is a dreadful process of getting your house seized by the bank or lender that issued your mortgage plan. The lenders will have the legal right to take ownership of your home when you miss multiple payments in a row. When it is proven that a homeowner can’t keep up with mortgage payments, then they will officially default. Legally, the bank or lender is allowed to seize the house, sell it, and make up for the financial losses. The sale process is usually conducted through an auction, which puts the home for sale for several investors and the highest bidder wins it.
Gathering Documents and Building a Case
When homeowners fall behind on their payments, they must get organized and gather important documents to build a strong case later. These documents should include all the records related to monthly billing statements, insurance information, past payments, property tax information, letters sent to lenders that prove you filed for an extension, and even escrow statements if you applied for recurring deposits. The housing market in Florida is booming, but it does have its fair share of foreclosures as well. Advice from the Fort Lauderdale foreclosure defense lawyers at fight13.com suggests that proactive action is key to protecting your rights. Learning about your legal rights can help you build a case that can buy you some time so you can avoid having your home seized by your lender. You have the right to reinstate the mortgage loan if you manage to come up with the money needed for past-due amounts. If the foreclosure process started early and you have evidence that shows that the 120 delinquent days in payments haven’t passed, then the process will get pushed.
Respond To Letters
Responding to any letter from the lender is smart because it shows good faith and makes them feel that they are heard. These letters are notices or warnings that let you know that you’ve fallen behind on your mortgage payments. The lenders send these letters to keep you in the loop of the amount due, how many days are left until your home gets seized, and possible lawsuits. However, when you respond promptly and call them to ask for an extension, they may consider it and give you a second or even third chance.
Try not to test your luck because some banks or lenders aren’t too keen on agreeing to extensions. The letters they send can have important information on what to do to get yourself out of this situation as well. It may help you when you acknowledge these communications because not responding or opening these warnings will not look good in court.
Refinancing and Getting Forbearance
Homeowners should negotiate with lenders and banks to refinance their loan agreement, either with the help of lawyers or alone. A home refinancing can change the loan structure to a plan that you are capable of paying every month, but the duration of the loan will increase. If you manage to prove that there were sudden medical emergencies in your life that caused the issue of missing payments, then lenders may grant you a forbearance if you have significant proof of the medical emergency.
The key is not to panic if you’re faced with foreclosure, even though it can be a stressful and scary time. Try to compose yourself and think about the different options that you can go for whenever you start to fall behind on your monthly payments. This process can drag for a long time, and homeowners don’t have to leave immediately because the system protects their rights and there are regulations in place that can give them a chance to redeem themselves and keep their homes. However, you will get warning letters and a legal duration until you are forced to leave. Banks or lenders are legally allowed to seek help from the police department to make sure that the process goes as planned, so you must come up with a solid plan to pay off what you owe or delay the foreclosure process.