Can You Get Out of Foreclosure Once It Starts?
The Florida foreclosure process cannot officially begin until you have missed more than 120 days – or four months – of payments on your mortgage loan. But once foreclosure does start, there are still ways to prevent it from happening. Don’t be left to the mercy of the bank. Take action as early as you can, even if it’s after the foreclosure notice has arrived in your mailbox.
Here are four strategies for bringing foreclosure to a stop:
- Reinstate the mortgage – One way to avoid foreclosure is to bring the loan current again by paying off the total past-due amount in one lump sum. Paying off the default amount, including any fees and penalties, allows you to reinstate the mortgage. Once you are caught up on the loan, you would be considered back on track with your regular monthly payments. While this is an effective strategy, it can often be difficult for homeowners to pay the past-due amount in one payment.
- Modify the loan – A second option for stopping the stopping foreclosure is to seek a loan modification. With this option, you can ask your lender to modify the terms of your existing loan, such as by reducing your monthly payments or adjusting the interest rate. A modification is not the same thing as a refinance as you still will have the same mortgage, but it does change the payment terms of your loan to make your monthly payments more manageable for your financial situation.
- Sell your home – Foreclosure can have a serious impact on your credit and may affect your ability to secure loans in the future. If foreclosure feels inevitable for you, another option is to try to sell your home prior to the foreclosure auction. With a short sale, your strategy is to try to sell the home for enough money so you can repay what you owe to your lender. Even if you can’t sell it for the same amount, you may be able to cover the remaining amount with other savings. Talk to your lender if you are interested in short selling your home and ask them to consider delaying the auction so you have time to sell your property.
- Consider declaring bankruptcy – As a last resort, some homeowners consider declaring bankruptcy as a way of avoiding foreclosure, but it is not without its risks and consequences. When you file for bankruptcy, an automatic stay is put on your loans as soon as the bankruptcy petition is filed, which means lenders and creditors can’t collect on any of your debts until the bankruptcy case has been settled.
Some homeowners consider bankruptcy as an option for avoiding foreclosure because it gives them more time to continue evaluating their options. It may also lead to more options for homeowners to retain ownership of their property. For example, under a Chapter 13 debt repayment plan, you may be able to avoid foreclosure by making timely payments throughout the course of your repayment plan. Depending the circumstances, there may also be opportunities to use lien stripping to save your home if you have multiple mortgages on your home.
As a Florida homeowner facing foreclosure, it’s important to talk to an experienced legal professional before taking any action. At Jacobs Legal, we will advise you on your legal rights and make sure the bank does not get away with stealing your home away from you. Contact us right away if you are having trouble keeping up with your mortgage payments.