Avoiding Foreclosure

 

 

 

Tips for Avoiding Foreclosure

 

 

 

Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

 

    * Don't ignore the letters from your lender

    * Contact your lender immediately

    * Contact a HUD-approved Housing Counseling Agency

    * Toll FREE (800) 569-4287

    * TTY (800) 877-8339

 

If you are unable to make your mortgage payment:

 

1. Don't ignore the problem.

 

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

 

2. Contact your lender as soon as you realize that you have a problem.

 

Lenders do not want your house. They have options to help borrowers through difficult financial times. 

 

3. Open and respond to all mail from your lender.

 

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems.  Later mail may include important notice of pending legal action.  Your failure to open the mail will not be an excuse in foreclosure court.

 

4. Know your mortgage rights.

 

Find your loan documents and read them so you know what your lender may do if you can't make your payments.  Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office. 

 

5. Understand foreclosure prevention options.

 

Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at www.fha.gov/foreclosure/index.cfm.

 

6. Contact a HUD-approved housing counselor.

 

The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide.  Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call (800) 569-4287 or TTY (800) 877-8339.

 

7. Prioritize your spending.

 

After healthcare, keeping your house should be your first priority.  Review your finances and see where you can cut spending in order to make your mortgage payment.  Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

 

8. Use your assets. 

 

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income?  Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.  

 

9. Avoid foreclosure prevention companies.

 

You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender.  While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

 

10. Don't lose your house to foreclosure recovery scams!

 

If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home!  Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

 

Agencies in the Kalamazoo Area

 

KALAMAZOO NEIGHBORHOOD HOUSING SERVICES, INC

 Phone: 269-385-2916

Fax: 269-385-9912

E: tim@knhs.org

W: www.knhs.org

802 S Westnedge Ave

Kalamazoo, Michigan 49008        

- Fair Housing Assistance

- Home Equity Conversion Mortgage Counseling

- Home Improvement and Rehabilitation Counseling

- Homebuyer Education Programs

- Loss Mitigation

- Marketing and Outreach Initiatives

- Mobility and Relocation Counseling

- Money Debt Management

- Mortgage Delinquency and Default Resolution Counseling

- Postpurchase Counseling

- Predatory Lending

- Prepurchase Counseling

- Renters Assistance

-        Services for Homeless

 

GREENPATH, INC 

P: 888-860-4167

W: www.greenpath.com

 7127 South Westnedge Ave, Ste 5C

Portage, Michigan 49081

 - Fair Housing Assistance

- Home Equity Conversion Mortgage Counseling

- Homebuyer Education Programs

- Loss Mitigation

- Marketing and Outreach Initiatives

- Money Debt Management

- Mortgage Delinquency and Default Resolution Counseling

- Postpurchase Counseling

- Prepurchase Counseling

- Renters Assistance

- Services for Homeless

 

Michigan Foreclosure Laws

 

Michigan foreclosures are primarily handled out of court. The foreclosure process can take 3-14 months depending on the length of the redemption period. The typical foreclosure takes about eight months.

Michigan Overview:

 

Judicial Non-Judicial       Process Period    Sale Publication Redemption Period          Sale/NTS

Yes       Yes                   60 Days                         30 Days                         30-365 Days                   Sheriff

Comments:Judicial Foreclosures are not common

 

Pre-foreclosure Period

 

Court foreclosures are permitted in Michigan; however, most mortgages contain a clause enabling a lender to sell a property out of court once a borrower defaults. While Michigan law does not require that a lender send out a default notice to the borrower before scheduling a foreclosure sale, the mortgage may require the notification. The borrower's right to stop the foreclosure by paying off the default is also dictated by the mortgage.

 

Notice of Sale / Auction

 

The foreclosure sale usually occurs about two months after the lender starts the foreclosure process. A notice of sale is published once per week for four weeks in a local newspaper, and the sale may not be less than 28 days from the first publication date. The notice is also posted on the property during the publication period. The notice of sale must contain the lender and borrower names, mortgage information, the default amount, a legal description of the property, and the length of the redemption period.

 

A trustee or sheriff conducts the public auction between 9:00 a.m. and 4:00 p.m., usually at the county courthouse. Anyone may bid, and the property is sold to the winning bidder. The sale may be postponed by posting a notice of adjournment at the time and location of the sale.

 

The person conducting the sale completes the necessary documents to transfer ownership to the winning bidder at the sale, and those documents must state the redemption expiration. The redemption period varies, but typically runs six months from the foreclosure sale date. During this time, the borrower can redeem the property by paying the winning bid amount and applicable costs.

 

If you have tried everything else and you still cannot avoid foreclosure, contact the Law Office of Michael E. Boersma, PC.

 

It might not make financial sense to attempt to hold on to your house if you have an adjustable rate mortgage that you cannot renegotiate, or if your home’s value has dropped below the mortgage value of your home. However you still have options.

 

The Law Office of Michael E. Boersma, PC has experience negotiating with lenders to allow you to attempt a short sale on the home. A short sale is where the home is sold for less than the amount of the balance on the mortgage. The bank still gets a good percentage of the mortgage and your credit score may remain unaffected.

 

The Law Office of Michael E. Boersma, PC also has experience negotiating the exchange of a deed in lieu of foreclosure with mortgage lenders. A deed in lieu of foreclosure allows you to walk away from the home. This saves you money and it saves the bank the expense of a foreclosure lawsuit.

 

Defaulting on a loan will result in a blemish on your credit score.  You may be sued by the lender if there is a deficiency between the value of what the house brings at sale and what is owed on the house. You need assistance. Please contact me at 269-720-1409.