Q: If I lose my house in foreclosure are my chances of buying again lessened? – A: If you apply for a loan on another house your past foreclosure will show in your credit history. This does not mean you will not qualify for a loan; however you are less likely to receive, for instance, a low down payment loan. It is very important to stay informed and knowledgeable in how to stop the Foreclosure before it happens. There are people who are willing to take the time and help.
Q: If I am in foreclosure, how much time do I have until I have to leave the house? – A: Laws vary from state to state; in states like Georgia a foreclosure house for sale is advertised to the public only seven days after being filed. However in other states, the house is not publicly advertised until the 130th day of the foreclosure process. If you look online or go to the library and look up your state legislature, you will find a slue of detailed statutes. Do some research so you know exactly what timeline you are dealing with, but the bottom line is to act as quickly and wisely as possible.
Q: Does the lender have the right to repossess my house, even though I have been paying for it all this time? – A: Unfortunately, yes. Even though you only missed those few payments and had paid so many others, the mortgage documents or deed of trust (depending if you live in a judicial or non-judicial state) gives the lender the right to foreclose and repossess the property after you have defaulted on payments for a certain length of time.
Q. How does a foreclosure affect my credit? – Ans. Well, it is serious. The lenders I have spoken with tell me it will be about a 400 pt hit on you credit score. Really foreclosure is the last resort. There are a number of things that can possibly be done before you get to that point.
Q. When the lender forecloses you have to get out right away, right? – Ans. In Michigan when you miss your payment is 30 days past due you are in default, usually by the time a homeowner has missed 3 payments the bank and the collection department have been in contact(Note, return or answer those calls, they will try to work it out with you and possibly you will come out of it okay, it is better than going to foreclosure). At 90 days the loan is in serious default and the legal system begins to take over. Notice is served on the property by a posting on the property. In our area it is usually a notice tacked or stapled to the property by a deputy of the local sheriff. The Sheriff
Q. I have heard that the bank can take all of my property and even my retirement too, is that true? – Ans. No. They can only foreclose on what they have in the mortgage. No more, no less.
Q. Can I still live there after the Sherrif sells my house? – Ans. Yes, until the redemption period is up you can live in it. But if you move out, the lender may be able to accelerate the foreclosure period and take the property back quicker because the property was abandoned.
What is reinstating the loan? – This is when a borrower can “cure” the loan before the date of sale. Many states permit this. This requires the borrower to pay the amount in arrears, plus attorney’s fees and interest. This is a better proposition for the borrower, since the amount in arrears is usually much less than the entire principle balance, which occurs when the lender accelerates the debt. Most states have laws requiring a reasonable notice to the borrower before the acceleration takes place.
VOIDABLE | a condition capable of being made void, although not necessarily void in itself.
What are redemption rights? – These is when the borrower has the right to “redeem” what is owed and get title to their property after the sale. This is not available in all states and the length of this period varies. When the redemption period is long, investors purchase the junior liens on the property so that they may have the right to redeem the property from foreclosure. Whoever holds the most junior lien has the last right to redeem the property by paying the underlying liens. The highest right is reserved for the owner. By obtaining a quitclaim deed for the owner, you have the right to redeem the property yourself.