• What Happens When Your House Goes Into Foreclosure?

    by Mark Weinstein

    The foreclosure process is pretty straightforward, and it helps if you know what to expect when this happens. This is a VERY common question at our firm.

    Question: What happens when your home goes into foreclosure?

     

     My Answer:  If your house has been foreclosed upon then you no longer own the house.  If that is the case, then the new owner, a bank or private owner, will soon be in touch with you to discuss your vacating the property.  If you do not voluntarily vacate then an action to evict you from the house may be brought against you.  To get you to cooperate, the bank may offer you money to voluntarily hand over the property in good condition.  This is sometimes referred to as a” cash for keys” program.

     

     
    Pre-Foreclosure
    If the house has not yet been foreclosed upon, but you have received notice that the bank or other lien holder intends to foreclose on the home, then you have several options.
    These include, among others:
    • Coming current on your mortgage and seeking to have the bank reinstate the mortgage;
    • Walking away from the home and letting the bank foreclose;
    • Giving the bank a deed in lieu of foreclosure;
    • Selling the house and paying off the mortgage or getting short sale approval from the bank in the funds obtained from the sale are not sufficient to cover the mortgage;
    • Filing for bankruptcy to get a stay that will temporarily stop the foreclosure which may buy you time to latter re-assume the mortgage.

     

     

    You may also qualify for a loan modification program. But, you need to be careful because while you are trying to work out a loan modification, often the foreclosure process continues to proceed. Before you can complete the loan modification, you may find that the bank has already acted to foreclose on your home. 

     

    Unfortunately, this has happened to many homeowners.  Some of these homeowners may then have an action for wrongful foreclosure depending on the precise circumstances, but it is better to be proactive and not wait until you house is actually foreclosed upon. 
    If you are facing foreclosure, you should seek the assistance of an attorney to discuss which options may be right for you in your particular circumstance.Disclaimer: The above is intended as general information and your specific situation may be different so it is always important to speak with a lawyer about your specific situation.

     

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