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Frequently Asked QuestionsQ: What Happens When I Miss My Mortgage Payments? A: Foreclosure may occur. This is the legal means that your lender can use to repossess (take over) your home. When this happens, you must move out of your house. If your property is worth less than the total amount you owe on your mortgage loan, a deficiency judgment could be pursued. If that happens, you not only lose your home, you also would owe HUD an additional amount.Both foreclosures and deficiency judgments could seriously affect your ability to qualify for credit in the future. So you should avoid foreclosure if possible. Q: What causes a home go into foreclosure? A: The Foreclosure process usually begins after a borrower has missed three mortgage payments. The lender will then record a notice of default against the property. Unless the borrower satisfies the debt, the lender will foreclose on the mortgage and set up a trustee sale.See additional Questions next column... |
Q: When does foreclosure begin? A: Lenders will begin foreclosure proceedings
when the borrower becomes delinquent in their mortgage payments,
usually after three payments are missed. The lender then notifies
the buyer in writing that the loan is in default. The lender can
request a trustee's sale or a judicial foreclosure, in which the
property is sold at public auction.
A borrower can settle the default by paying the past due amount and the pending payment after the notice of default is recorded, usually no later than a few days before the property's sale. Borrowers should do anything and everything they can to avoid foreclosure proceedings. Property foreclosure is one of the most negative actions that can occur on an individual's credit history report. Q: What happens at a trustee sale? A: In a trustee sale, the lender holding the
first loan on the property starts the bidding at the amount of the
foreclosed loan. Winning bidders receive a trustee's deed.
Q: Can a home be sold for less than its mortgage? A: Yes, in some cases, but it depends on the lender.
This is defined as a "short sale." Sometimes a lender
will be willing to split the difference between the sale price and
loan amount, which still must be paid. |
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DISCLAIMER: Legal information is not the same as legal advice! The information on the ShavedLizard.com Web Site is provided with the understanding that the authors and publishers are not herein engaged in rendering legal advice. As such, the information presented here should not be used as a substitute for consultation with a professional legal or other competent adviser. While we have made every attempt to ensure that the information contained on this Web Site has been obtained from reliable sources, we are not responsible for any errors or omissions, or for the results obtained from the use of this information. |