Foreclosure seems like the End Times for anyone affected by it, for the simple reason that it’s usually unfathomable that it can happen to you – until it does. Panic is usually the first reaction to a foreclosure notice, but as with all difficult situations, it’s the absolute worst reaction. While the number of foreclosures in 2014 has fallen to its lowest level since 2006, that’s still over a million of properties affected.
The most important fact about foreclosure is that it doesn’t begin when you miss a couple of payments. Most lenders will send you a notice after you miss three or more payments, informing you that you defaulted on your loan and specify an amount you need to pay in order to make it current again, along with a deadline (typically 30 days). It’s only once this deadline expires that you can expect foreclosure proceedings to begin. As such, you usually have four months after making the last payment to prepare for the inevitable or try to fix the situation.
Each state governs foreclosure in its own way, with the precise method for foreclosure determined by its laws and your situation. Typically, foreclosure can be either judicial or non-judicial.
In judicial foreclosure, you will receive a complaint and summons to the court as the lender files a foreclosure lawsuit against you. It is important to respond to the lawsuit (preferably challenging it), as if you miss the deadline for a response, the court will rule in absentia in favor of your lender and allow the foreclosure to proceed.
In non-judicial foreclosure, the lender doesn’t have to go through the courts and will usually send you a notice of default and a notice of sale – the precise form depending on local laws and the whim of the lender.
Obviously, the latter situation is less advantageous to you, as it usually proceeds faster and you will have to vacate the premises earlier. However, in both cases you remain the legal owner of the property until the foreclosure process terminates in a successful sale. The sale alone can take several months to complete. In judicial foreclosures, the court proceedings can add as much as a year to the total foreclosure time, giving you time to prepare for finding a new home – and find you should, as once the house is sold, you will likely be served a notice to vacate, which can end in eviction if you remain in the house past that date.
While horror stories related to foreclosure abound, it’s important to remember that with a little bit of preparation, you can survive foreclosure with your sanity intact. You have time to prepare for it and until the property is sold and you’re served with the notice to vacate the premises, save up money and look for affordable rentals in advance. Inaction is the worst choice in any situation – and with foreclosure, it can quite literally end up with you on the street.
You should also consult with professionals like the attorneys at the Van Horn Law Group to make sure you are following the best course available.
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