What is the Foreclosure Process?

Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has stopped making payments. This typically involves selling the property used as collateral for the loan. Here’s an overview of the foreclosure process:

1. Missed Payments: The process begins when a homeowner misses mortgage payments. Lenders usually allow a grace period before initiating foreclosure.
2. Notice of Default: If payments remain unpaid, the lender issues a Notice of Default (NOD), informing the homeowner that they are in breach of the mortgage agreement. This notice is typically filed after 90 days of missed payments.
3. Pre-Foreclosure: After receiving the NOD, the homeowner enters a pre-foreclosure period, during which they may try to negotiate with the lender, catch up on payments, or sell the property to avoid foreclosure.
4. Notice of Sale: If the homeowner cannot resolve the default, the lender will issue a Notice of Sale, setting a date for the auction of the property. This notice is typically published in local newspapers and posted on the property.
5. Auction: The property is auctioned to the highest bidder, which could be the lender itself. The new owner takes possession of the property, and any remaining balance on the mortgage becomes the homeowner’s responsibility unless it’s a non-recourse loan.
6. Post-Foreclosure: If the property is not sold at auction, it becomes a Real Estate Owned (REO) property, owned by the lender. The lender may then sell it on the open market.

Do I Need an Attorney for Foreclosure?

While it is not mandatory to have an attorney during the foreclosure process, it is highly recommended. Here’s why:

• Legal Expertise: Foreclosure involves complex legal procedures that an experienced attorney can help navigate, ensuring your rights are protected.
• Negotiations: An attorney can negotiate with the lender on your behalf, potentially arranging a loan modification, forbearance, or a short sale to avoid foreclosure.
• Defense Against Wrongful Foreclosure: If there are errors in the foreclosure process or if you believe the foreclosure is unjustified, an attorney can provide a defense and potentially stop or delay the foreclosure.
• Court Representation: If the foreclosure case goes to court, having an attorney to represent you can make a significant difference in the outcome.
• Bankruptcy Options: An attorney can advise you on whether filing for bankruptcy might be a viable option to halt the foreclosure process temporarily.

In summary, while it’s possible to go through foreclosure without an attorney, having one can provide you with the expertise and advocacy needed to explore all possible options and protect your interests. Give us a call today to for a free foreclosure consultation!