Things to Keep in Mind During a Looming Foreclosure


Things to Keep in Mind During a Looming Foreclosure

Foreclosure can be among the most difficult things a person can deal with. When your primary home faces foreclosure from a bank, you often feel overwhelmed by stress, anxiety, and sadness. For many people, our home represents a kind of sanctuary, a place of refuge to which we can retreat from the challenges of everyday life; to have this place taken away is akin to removing a key sense of security and safety. If foreclosure is looming, there are several things which you should keep in mind. You need to understand that simply because a foreclosure is scheduled doesn’t mean that it will necessarily take place, or that it will take place without any serendipitous delays. In this post, we will go over a few key pieces of information you need to know about if foreclosure is on the horizon.

Bankruptcy Can Be Used to Stop or Delay the Foreclosure

If you’re facing foreclosure, you need to be aware that bankruptcy can be useful to either stop or delay this action. If you file Chapter 13 bankruptcy, you may be able to stop the action altogether by restructuring your debts and paying everything based on a court-approved repayment plan. If you go this route, however, you need to make sure that you have the financial capability to make this viable. If you won’t be able to develop such a repayment plan, then the Chapter 13 won’t be successful and the foreclosure will eventually resume. Chapter 7 bankruptcy will only delay the foreclosure, but during the process of Chapter 7 bankruptcy you may be able to save your home by seeking loan modification. Even if you can’t obtain modification, you will still have a hiatus in which you won’t make payments and can stockpile funds to make accommodations after the bankruptcy is finished. In both cases, you should know that Chapter 13 and Chapter 7 bankruptcies produce an “automatic stay” during which the foreclosure action cannot proceed any further.

Assert Defenses in Florida Foreclosure Action

Florida is a judicial foreclosure state which means that a lender must go through the courts in order to foreclose and sell your property. You have the right to assert defenses in case to challenge the foreclosure. Some of the most common challenges asserted in a foreclosure lawsuit are as follows: (1) the lienholder doesn’t actually hold the promissory note, (2) the lienholder violated a relevant law, (3) the lienholder didn’t act in compliance with state requirements on mediation, (4) the lienholder made a mistake during the foreclosure process itself, or (5) the lienholder made some type of serious error, engaged in predatory behavior, or something similar. Defending in the foreclosure action will normally give a homeowner more time in the property before a foreclosure sale is ordered. The extra time allows homeowners time to make decisions on how to keep the property. Perhaps the homeowner will get a new job or apply for a loan modification during the time before the foreclosure sale. One thing is certain, a homeowner who wants to save their property from foreclosure in Florida will want to defend in the lawsuit to ensure that the lender has followed all applicable laws prior to accelerating the loan and foreclosing.

Consider the Option of Applying for Loan Modification

One other option is to apply for loan modification. Typically, loan modification takes the form of lowering the interest rate and extending the overall term of the loan itself. In some cases, lenders may be willing to do this in order to avoid foreclosure. Remember, foreclosure is often an undesirable practice for lenders, because there is no guarantee that a home will sell for a certain price at a foreclosure auction. In many cases, lenders are financially better off when they renegotiate with borrowers and allow them to modify their mortgage. The loan modification acts as a formal revision to the underlying promissory note.

Contact Financial Freedom Advocates for More Information

If you’d like to learn more, contact Financial Freedom Advocates today by calling 786-668-6688.
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