Receiving a foreclosure notice is certainly stressful and rather terrifying, it is not the end of the world, nor does it mean that you are financially doomed.
There are several actions you can take to manage the situation and avoid potentially losing your home.
Here are some of the most crucial steps you should take immediately after receiving a foreclosure notice.
Do not ignore the notice
While the stress of the situation may cause the urge to stick your head in the sand, ignoring the notice will only land you in further trouble.
Lenders have an obligation to follow legal procedures, and even if you refuse to respond, the foreclosure process will move forward.
It is recommended that you take action within 30 days of receiving the notice to avoid losing your default judgment options.
Get a Better Understanding of the Process
The foreclosure process can be a complicated one to wrap your head around. Start by familiarizing yourself with the laws specific to your area and the types of foreclosures.
Generally, there are two types: Judicial and Non-Judicial.
Judicial requires the lender to go through the courts for foreclosure, while non-judicial allows the lender to foreclose without any court involvement, and is solely based on the terms of your mortgage agreement.
Contact Your Lender
It is crucial to reach out to your lender after receiving a foreclosure notice to work on alternative plans. Some of these alternatives may include loan modification to reduce your monthly payments and extend your loan payment plan, a repayment plan that allows you to catch up on your missed mortgage payments over time while still making your regular mortgage payments, or forbearance which temporarily suspends payments allowing you time to collect more funds.
Look Over Your Financial Situation
Besides your mortgage situation, it is important to review where the rest of your finances are going. You may have to cut back on other expenses such and reduce leisurely spending.
Consider bringing in additional income to catch up on all your missed payments, such as taking on a part-time job or taking out a loan.
File for Bankruptcy
Bankruptcy can provide temporary relief from foreclosure. Chapter 13 allows you to restructure your debts and make payments over time, including due-past mortgage payments. This can halt the foreclosure process altogether.
You can also file for Chapter 7 Bankruptcy, which can temporarily stop the foreclosure process, but you are still required to make the late mortgage payments at the expense of potentially losing your home.
Prepare for Worst Case Scenario
While it may be difficult to digest, you’ll always want to prepare yourself for worst-case scenarios.
If it even becomes clear that you will be unable to keep your home, make plans for alternative housing. Ask a friend or family member if you can stay with them for awhile. Scrape up some leftover funds to cover a motel stay.
Having a plan will make the transition smoother if the loss of your home is unavoidable.
Foreclosure does not always necessarily mean that you will lose your home. Contacting legal experts and exploring all available options gives you the best chance possible.
Your home can be protected and you can recover from financial damage.
Our experts at Todd Cushner & Associates are ready to guide you through the foreclosure process if needed. Contact us today for a free consultation.