In times of financial hardship, it is common for owners of a mortgaged property to face significant challenges in keeping up with their payments and a foreclosure takes place. But, can you get out of foreclosure?
A client of ours asked himself this question. He found himself in a difficult situation when his tenants stopped making rent payments due to limited income.
The lack of regular income threatened to push the investment property into foreclosure.
Can you get out of foreclosure? Action strategies
How to stop foreclosure? Fortunately, with the right intervention and an effective legal strategy, the debtor was able to save his property from foreclosure. A restructuring of the loan secured on the investment home was negotiated, all without the need to disburse any money upfront.
Thanks to this negotiation, a new mortgage payment plan was established based on a reduced interest rate of 4.75%, allowing the owner to keep the property and avoid the loss of his investment.
This situation is a clear example of how, with the right guidance and a strategic approach, it is possible to overcome seemingly insurmountable financial challenges.
What happens if you don’t pay your mortgage?
If you don’t pay your mortgage in the United States, the consequences can be serious and progressive. What usually happens in these cases?
- Late payment: When you don’t pay your mortgage on the due date, your lender will initially charge you late fees. These fees are added to the balance you owe.
- Notices and notifications: After 30 days of being late, the lender will report to the credit bureaus, which will affect your credit score. You will receive letters or calls from your lender warning you about the outstanding debt.
- Default: If you continue to not pay, usually after 90 days of being late, the lender can declare you in “default.” This is a major step toward foreclosure.
- Foreclosure process: If you fail to catch up on your payments, the lender will start a foreclosure process to repossess the property. Depending on the state you live in, this process can be judicial or nonjudicial, but in both cases, the result may be that you lose your home.
- Sale of the property: The property can be sold at a public auction or the lender can purchase it and then sell it on the market. If the sale value does not cover the outstanding debt, in some states, you could still owe the remaining balance (known as a “deficiency“).
- Long-term impact: A foreclosure will remain on your credit report for up to 7 years, making it difficult to obtain credit in the future and potentially affecting your ability to rent a home.
If you are facing difficulties paying your mortgage, it is important to contact your lender as soon as possible. They may offer options such as loan modification, deferred payment plans, or even the possibility of selling the property in a “short sale” to avoid foreclosure.
Yes, there are ways to stop foreclosure immediately and if you want to know if you can “save my home from foreclosure”, contact experts in the field.
I can’t pay my mortgage, what should I do?
If you find yourself in a similar situation, contact S&B Legal today. We offer free consultations to evaluate your case and provide you with the assistance you need to protect your assets and maintain your financial stability.