Defending Against Foreclosure: Evaluating the Options

Defending Against Foreclosure: Evaluating the Options

When face to face with foreclosure, it is difficult to think about all the ramifications of the process. To get by the thought of losing a home is a hard battle, and sometimes one wants to give in to a feeling of helplessness. There are options to consider, and other avenues that can be pursued. No one wants to be denied a future home because of the black mark of foreclosure on personal credit.

Selling the Property

The owner has the option of selling the property to pay the debt named in the foreclosure. The owner can sell the property at any point before the law day or date of sale. Make sure if a buyer is found that the sale price will cover the debt and any already accrued court and legal fees associated with the foreclosure case.

Eviction/Foreclosure Intervention

There are programs available from several different agencies which can help with foreclosure. They provide mediation services, as well as grants for delinquent conventional mortgages. They can also provide negotiation of mortgage-holder agreements and payment rescheduling.

Grant eligibility is normally based on income, income percentage used to pay for housing, availability of funds, why the account fell into arrears, and the owner’s future ability to make payments on time. The amounts of the grants are normally in the range of only $1200, and the grant, in addition to any other funds gathered by the owner, must be able to resolve the foreclosure. Mediation is open to everyone who is facing foreclosure. Check with the local state and city programs for specific information.

Deed in Lieu of Foreclosure

If there is no chance of selling the home, or there is no equity in the property, the owner might consider Deed in Lieu of Foreclosure. What happens is that the owner turns the deed to the property over to the bank or lender. If the lender or bank accepts the deed, then the bank or lender will forego the whole foreclosure process. The main benefit of this option is that there will not be a foreclosure on the owner’s credit. Seek legal advice from a state certified attorney before pursuing this option.

 

Court Protection for Unemployment and Underemployment

If the owner is unemployed or underemployed, one may be entitled to court protection. If the protection is granted, it will suspend and postpone the foreclosure for up to six months. To decide whether or not one is eligible for this protection, check the state’s specific requirements and their definition of underemployed as these vary by state. In addition, there must be a realistic chance of earning more money in the future, which will allow the owner to pay both past and upcoming payments. One will need the assistance of an attorney to file for court protection.

Please note that these protections only apply to first mortgages on personal residences that have been owned for at least two years.

Getting an Extension

If more time is needed to sell the home or to pay off one’s debt, which is called redemption, a motion to reopen can be filed. The owner will have to state the reason for the request, and explain the plan to redeem and when in detail. The owner must file the motion and be heard before the law day or date of sale. Keep in mind court delay between filing and when a hearing can be scheduled. One must attend the hearing personally, and it is suggested that the owner bring or have the advice of legal counsel.

Consider all the options before taking action. It is highly recommended that one contact and retain an attorney for the foreclosure process. Discuss the options with the attorney and move forward with actions that one is comfortable with taking.


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