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What to Do When You Get a Foreclosure Notice

Foreclosure notice

What to Do When You Get a Foreclosure Notice

You have put a lot of time and money into your home.  The last thing you want is to lose it.  Even if you get a foreclosure notice, don’t panic.  There are still ways to slow down the process and save your home.  So what is foreclosure, and what should you do if you find yourself with a notice?  Find answers to these questions and more below.

What is foreclosure?

Foreclosure refers to the process where the bank repossesses a home due to payment debt.  If you are just a few days behind paying your mortgage, that won’t send you into foreclosure.  Most banks have a grace period of around 15 days before you are officially behind on payments.  Even if you miss this cutoff, you won’t receive a foreclosure notice until 90 days after you fail to make a payment.  Once you get this paperwork, there are a few steps you should take.  Ignoring the problem won’t make it go away.  It may actually make it worse.

Educate yourself

The very first thing you need to do after receiving a foreclosure notice is to learn all you can about it.  Read all the papers your bank has sent you, including your mortgage.  There should be information in there about late payments and foreclosure options.

You also need to find out if you live in a judicial or non-judicial foreclosure state.  If your state is judicial, your lender will have to file a lawsuit against you in order to foreclose.  This means that you may eventually need a foreclosure attorney if you can’t work out a plan by yourself.

Call the bank and make a plan

It may not feel natural to call the very place that is attempting to take your house, but talking with your lender is very important.  Foreclosure is expensive, so most banks would rather work out an alternative payment plan instead of going through the entire process.

There are a few different conclusions the bank may come to.  They may offer to refinance your home, which is where a new loan is created that includes both the missed and future payments.  Another option is a repayment plan that fits within your budget.  This makes sure that you are able to start paying again and that the bank eventually gets back the money you missed paying them.

A third option is forbearance.  This is where your payments are suspended for a specific period of time and your mortgage is extended.  Basically, you make a few months’ worth of payments at the end instead of right now.  Another thing the lender may offer is loan modification.  This is where you keep the same loan but things like monthly payment amount and interest rate are changed in order to make it more manageable for you.

Unable to reach a compromise with your lender?

If you’ve talked to your bank and can’t come to a conclusion that suits both of you, it may be time to reach out to someone else.  There are federally-funded agencies that provide housing counselors to those who need them, which is a good option.  If you are deeply in debt and don’t see any way out of this foreclosure, you may want to consider filing for bankruptcy.  This could either cancel your debt or allow you to keep your property with a new repayment plan depending on the type you file for.

Need a foreclosure attorney?

Whether you need to fight your bank in court or file for bankruptcy, Bartifay Law Offices can help.  Call (412) 824-4011 to schedule a free consultation. 

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