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If you're in danger of losing your home because you can no longer afford to pay the mortgage, you may have some recourse. Read on to learn more about how the foreclosure process works and how you may be able to save your home. People in this situation should consult an experienced attorney who can review their individual finances and help come up with a viable solution.
Understanding the Process
This process begins when you are no longer able to make your monthly mortgage payment. This often occurs because of financial hardship, such as unemployment, divorce, death in the family, or medical challenges that result in substantial hospital bills. In some cases, the homeowner is no longer able to afford the payment on an adjustable rate mortgage when the interest rate changes. If you're struggling to make your mortgage payment, talk to your lender as soon as possible. Many banks are willing to work out a payment plan or assist you with modifying the loan into more affordable terms.
After three to six months of missed mortgage payments, your lender will file a Notice of Default with the County Recorder's office. This serves as the official record that the home is in danger of being foreclosed upon, and begins a phase known as pre-foreclosure. During this 30 to 120-day period, you'll have an opportunity to work with the lender to pay off the defaulted amount, modify the loan, or sell the property for less than you owe in what is referred to as a short sale. If the missed payments are not made up during this grace period, the process continues and the home will be listed for sale at auction and/or possession of the property taken by the bank.
Strategies to Save Your Home
Although this is a challenging financial situation, it's not necessarily hopeless. Talk to both a lender and your attorney as soon as possible to explore your options. While it can be tempting to avoid the problem, the longer you do so the harder it will be to come up with a solution. Common strategies for those in danger of being foreclosed on include:
Filing for bankruptcy, which puts an automatic stay into effect that prevents the lender from foreclosing on your home. During the bankruptcy process, the courts will forgive and reorganizing your credit card and other debt, potentially making it easier for you to afford the mortgage. While the lender can file a motion to proceed, the process will be delayed by at least a month or two.
Applying for a loan modification, in which the lender lowers your interest rate, lengthens the mortgage term, or takes other measures to lower your monthly payments. If the modification application is approved, you'll be able to keep the home provided that you make these adjusted payments as agreed.
Filing a lawsuit to stop a nonjudicial foreclosure, in which the lender is taking possession of the home outside the court system. To save your home in this situation, you'll have to prove one of the following:
- The lender doesn't own the promissory note for the mortgage
- The lender did not comply with state mediation requirements
- The lender violated the Homeowner Bill of Rights for the state where you reside
- The lender didn't follow the state-mandated legal process for foreclosure
- The lender made another egregious error
We’re here to help in cases of foreclosure or any other financial difficulty that may require legal representation. Georgia Debt Relief has helped countless people in the greater Savannah Georgia region. Call us today to talk about how we can help you.