Can’t pay your mortgage? Wondering, “what now?” The good news is that there is a way to save your home and help get you out of debt, but timing is everything.
Defaulting on Mortgage Home Loan
When a mortgage loan is established, it basically means that the buyer agrees to pay back the lender within a determined time and for a specific cost. When payment is not made, the lender has procedures to handle the situation. Most mortgage lenders have some sort of “grace period.” Even if you’re payment is late, if it arrives within the grace period, you may avoid a late fee. However, if you have not attempted to contact the lender to negotiate payment and the grace period has expired, the lender will assume that your mortgage is “in default.” They will make attempts to contact you, and to collect. If these attempts are unsuccessful, the lender will begin the foreclosure process.
A mortgage loan is considered a “secured debt,” meaning that the lender can ultimately take back your property if the loan goes into default. File for Chapter 13 bankruptcy to save your home.
Home Foreclosure Facts
- A foreclosure is started when a summons and complaint is filed by request of your lender.
- Charges to your account continue, even after it has been deemed as “in-default.” Your mortgage company may charge for property inspections, property preservation services, legal fees, postage, etc.
- The longer the mortgage is in default, the more difficult and expensive it becomes to bring the account current.
- The bank may serve an eviction noticecannot take possession of your home until Foreclosure is complete.
- You have a limited number of days to dispute information you have been served.
- Contact a bankruptcy lawyer as soon as possible to discuss how to stop the foreclosure from proceeding, and save your home.
- If you want to take advantage of a Chapter 13 bankruptcy, it must be done before the mortgage company sells your home.
- All foreclosures must through a court.
- There is a redemption period is the minimum amount of time you have in the home before the house is sold by auction.
- If your property forecloses, it is public record.
- Foreclosure will have a negative impact on credit score making it difficult to get loans in future.
Visit the Foreclosure Resource Center for answers to more of your questions.
The longer you wait to do something, the fewer options you may have. Don’t fall victim to mortgage relief scams or home rescue scams. Talk to an experienced bankruptcy attorney today. The consultation is free.
Recent Foreclosure Settlement: How Does it Affect Wisconsin?
On behalf of Debt Advisors, S.C.
A recent settlement with the State Attorney General of Wisconsin and 48 other states looked like a light at the end of the tunnel for homeowners who face foreclosure or went through a foreclosure from 2008 to 2011. However, officials are now saying that the proceeds from the settlement may only make a small dent in efforts to decrease the number of foreclosures, and may only help a small number of homeowners who are struggling financially.
The suit that brought about the recent settlement was instituted against the nation’s five major mortgage lenders. State officials brought the action to recover a portion of the money received by banks from federal government bailouts. These dollars were intended to help stimulate a sinking economy and help homeowners stay in their houses after the loss of jobs. But most homeowners did not receive financial assistance, and many are still dealing with tight finances. The settlement may offer a small boost for a short time.
Homeowners behind on their mortgage payments may receive enough to cover one or two months of payments. But for those dealing with unemployment, a decrease in available jobs, and the prospect of waiting six months or more until the next paycheck, two mortgage payments will likely not be enough to keep them in their homes.
Other options exist for individuals facing credit card debt, job loss and high medical bills. One is bankruptcy. Filing for bankruptcy can stop a foreclosure proceeding during the pendency of the case. This can give homeowners time to work out a plan that allows them to stay in their homes. Depending on the type of bankruptcy, it may be possible to negotiate a payment plan with the lender, or the discharge of other debt may allow the homeowner to meet future mortgage payments.
When facing foreclosure, it is important not to ignore what is happening in the hope that creditors will just go away. Taking action and seeking legal advice is the best way to explore options and improve outcomes before it is too late.
Source: Channel3000.com, “Experts say Wisconsin’s foreclosure windfall feared not enough,” 4/23/12.
Increased Foreclosure Numbers in Wisconsin
On behalf of Debt Advisors, S.C.
Data on foreclosure rates across the nation show that Wisconsin experienced a significant increase in foreclosure activity in July 2011. With a 43.3 percent increase in the number of foreclosure filings from the previous month, Wisconsin’s experience contrasted with the declining numbers of foreclosure proceedings nationwide.
According to the U.S. Foreclosure Market Report published by RealtyTrac, a marketer of foreclosed properties, 4,534 Wisconsin properties received foreclosure filings in July, which is an average of one in every 571 housing units in the state. These numbers put Wisconsin tenth for the highest foreclosure rate in the U.S.
Nationwide, foreclosure filings have declined for 10 months in a row. The July numbers are 4 percent lower than June 2011 and 35 percent lower than July 2010, reported the Eau Claire Leader-Telegram. However, foreclosure filings, which include default notices, scheduled foreclosure auctions and repossessions, were received by one in every 611 properties in the U.S. in July – still an exceedingly high number.
James Saccacio, CEO of RealtyTrac, was quoted by the Leader-Telegram as saying the decrease in foreclosure filings was originally started by the “robo-signing controversy” that arose in October 2010, temporarily halting foreclosure proceedings. Now, though, Saccacio reports that the decline may be attributed to foreclosure-prevention programs at both the state and national level, including loan modification and mortgage-payment assistance programs.
People struggling with mortgage payments and other debt have several options to help stop foreclosures and other debt-collection actions. By filing for Chapter 13 bankruptcy, for example, an automatic stay is instated, stopping any foreclosure proceedings and blocking creditors’ attempts to collect money. An experienced bankruptcy attorney can advise people as to which option is best for their particular circumstances.
Source: Foreclosures Up in Wisconsin
On behalf of Debt Advisors, S.C.
In February 2010, President Obama announced the “Hardest Hit Fund,” intended to provide assistance for homeowners in the states most affected by the downturn of the housing market and the recession. Under the program, $1.5 billion was initially allocated for innovative measures to help keep people in their homes, thereby preventing foreclosure and increasing the stability of the housing market.
At the outset, the federal government chose states for participation in this program based on two considerations. The five states selected had either higher than average unemployment rates or had experienced more than a 20 percent decline in home prices. Recognizing that the economic crisis has affected people across the country differently, each state’s Housing Finance Agency was granted the authority to distribute funds as necessary to effectively serve people in the state.
However, it quickly became apparent that this was not enough to address a problem the magnitude of the housing crisis.
In March, the program expanded to include five more states. These states were chosen because they had high concentrations of people living in areas of concentrated economic distress. The program aims to prevent what could become a tidal wave of foreclosures in these distressed communities. In August, Obama announced another $2 billion for the Hardest Hit Fund, adding five new states to the ranks of those receiving assistance.
For many, mortgages have simply become unmanageable. Between falling home values and rising unemployment rates, many individuals and families have simply become unable to meet their monthly mortgage payments, or it has become unreasonable to continue trying.
The federal government will undoubtedly keep trying to stabilize the housing market, as a strong housing market helps ensure a strong economy. However, for individual homeowners, it is important to consider personal situations. The fact that housing assistance is available does not mean that everyone should take it — for some, surrendering a home is an essential step in the financial recovery process.
If you are considering accepting housing assistance, or have questions related to bankruptcy and foreclosure, speak to a knowledgeable bankruptcy lawyer.