Homeowner Rights During Foreclosure
Obtaining your lender’s note of foreclose doesn’t mean that you’ve run out of choices. Foreclosure is a legal procedure which is included with legal rights for both sides; yours include the right to challenge the foreclosure in court, to prevent foreclosure by paying off the loan and to seek federal assistance if your loan is backed by the government-sponsored Freddie Mac or Fannie Mae businesses.
The Right to Purchase It Off
Even if you’ve received a notice of foreclosure, then you can stop the process by paying off your debt to the creditor, the Debt Workout site says. At the minimum this would necessitate covering your missed payments, plus interest, in addition to the lender’s legal expenses. In the event the creditor”accelerated” the loan program once you defaulted, you are going to need to repay the entire mortgage. In case you have a large enough sum of cash coming in–an inheritance, for example –you can talk to the bank about penalizing foreclosure long enough for you to repay the debt.
The Right to a Court Hearing
Judicial foreclosure is a court procedure. Your creditor must send you a summons and a complaint to notify you of the upcoming hearing, after which you have 15 to 30 days, based on state law, to file a reply. Filing provides you the right to contest the foreclosure from court; even if you don’t react, the Nolo legal site says, your lender will probably put his case to the judge with no opposition. In California and other states where housing loans are secured by a deed of trust, however, foreclosure is a nonjudicial procedure, and your creditor can bypass the courts.
The Right to Federal Help
Fannie Mae and Freddie Mac are government-sponsored corporations that buy up mortgages, which helps lenders offer lower rates. If your creditor does business with either corporation, you are able to delay or protect against foreclosure by applying for your Home Affordable Modification Program: Foreclosure can not proceed until your application is processed, and if you qualify, your creditor must agree to modify your mortgage. Lenders who don’t deal with the corporations don’t need to participate in HAMP, but the government offers financial incentives for lenders to do so. HAMP will take applications before the end of 2012.
The Right to Remain in Your Home
You don’t need to leave your home when foreclosure starts, the Debt Workout site says: You retain title to the house until your creditor sells it into the new buyer in a foreclosure auction. Even after that, you are able to stay ahead of the new owner really goes through your nation’s eviction procedure.
The Right of Redemption
In many states, for example California, you have the right of redemption: Once your home is sold at foreclosure auction, you now have a period of time, normally six to 12 weeks, to purchase it back. As stated by the Findlaw site, the redemption price is a formulation based on the auction price, so you could be able to get your home for less than either market value or the quantity of your debt.