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Foreclosure Stages: What You Need to Know

The foreclosure process will differ from one state to the next, however, there are five basic stages that make up the timeline.

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Foreclosure Stages: What You Need to Know

  1. 1. The Foreclosure Process Will Differ from One State to the Next, However, there Are Five Basic Stages that Make Up the Timeline FORECLOSURE STAGES – DAVID M. OFFEN PHILADELPHIA BANKRUPTCY ATTORNEY WHAT YOU NEED TO KNOW STAGES
  2. 2. Foreclosure Stages – What you Need to Know www.getfreeofbills.com 3 The thought of going through the foreclosure process is not one that anybody gets excited about. However, this is reality for thousands of homeowners throughout the country every year. Anybody who is faced with the prospect of foreclosure can learn more by contacting their lender and asking the right questions, such as:  Why are you moving forward with the foreclosure process on my property?  What stage of the process are you currently in?  Is there anything I can do right now to put an end to this? In other words, you need to be open and honest with your lender. This allows them to see that you are serious about fixing your problem as opposed to running away and hoping for the best. The foreclosure process will differ from one state to the next, however, there are five basic stages that make up the timeline. MISSED MORTGAGE PAYMENTS When you take out a loan to purchase a home, you agree to certain terms and conditions. As long as you continue to make your monthly payment, in full and without delay, your lender will be happy with you as
  3. 3. Foreclosure Stages – What you Need to Know www.getfreeofbills.com 4 a customer. If you miss a payment, you can expect your lender to notify you of this without delay. One missed payment will not result in foreclosure. When this becomes a habit, such as several missed payments, your lender has no choice but to step in and do what is best for them. Note: if you know you are going to miss a mortgage payment, no matter the reason, contact your lender to discuss your options. For instance, if you have lost your job or are facing a serious illness, your lender may be willing to work something out with you. NOTICE OF FORECLOSURE If you miss multiple payments and have not had discussions with your lender about what to do next, you can expect a notice of intention to foreclose or a foreclosure action to be filed against you This is also known as a notice of default, but does not mean your home is going to be repossessed. What it does mean is that the lender is aware of what is going on, and is proceeding to take action.
  4. 4. Foreclosure Stages – What you Need to Know www.getfreeofbills.com 5 In Pennsylvania the lender will typically notify you of what is happening. If you are still living in the property, this makes it simple for you to realize that you are facing a very serious situation. PRE-FORECLOSURE You can usually also put a stop to the foreclosure action by paying your mortgage account completely up to date. Many times your lender will refuse to take partial payments and will only agree to receive in full the total amount which you are in default. You still have time to stop the foreclosure process, but only if you step in now and make it known that you are willing to do whatever it takes to save your property. You can try to work out a repayment plan or a mortgage modification but this does not necessarily stop the foreclosure action Again - there are many things you can do to put a stop to a foreclosure action and prevent the lender from moving forward:  Make all back payments  Change the terms of your loan  Refinance your loan or get a mortgage modification During this stage, you may also want to discuss the possibility of a short sale if you are not interested in keeping the
  5. 5. Foreclosure Stages – What you Need to Know www.getfreeofbills.com 6 home. This is when the lender agrees to let you sell your home for less than what you owe. They are going to take a loss on the transaction, but in many cases it is better for the lender than a foreclosure. With a short sale you are not staying in your home, but instead selling it as a means of escaping your situation. HOME AUCTION As the name suggests, your home is auctioned off to the highest bidder during this stage. When this happens, your home is gone for good as somebody else is now the owner. In Pennsylvania, you can stop a foreclosure action or a sheriff sale by filing a bankruptcy prior to the sheriff sale.a right of redemption state, you have until the final day to negotiate a deal with your lender. In other words, don’t give up until your home is actually sold at auction. POST-FORECLOSURE If a Mortgage Foreclosure Sheriff Sale takes place in Pennsylvania, when the hammer falls it is too legally too late to take action to save the home. You can be forced out of your home. However, there are actions which you can take which may possibly allow you to be able to take to stay in the home. As with most situations, the earlier you act, the more you are able to accomplish and the easier it is save your home. Your best step to take is
  6. 6. Foreclosure Stages – What you Need to Know www.getfreeofbills.com 7 action at an early stage so that you can discuss how best to save your home. To improve your chance of staying in your home, hire an attorney that specializes in real estate foreclosures and bankruptcy. A legal professional can protect your rights, guide you through the process, and help you do whatever it takes to save your home.
  7. 7. Foreclosure Stages – What you Need to Know www.getfreeofbills.com 8 About the Author David M. Offen A native to the Philadelphia area, Mr. Offen attended Temple University College and Law School. Mr. Offen is licensed to practice in the States of Pennsylvania and New Jersey. He is a member of the Eastern District of Pennsylvania Bankruptcy Conference and the National Association of Consumer Bankruptcy Attorneys. David M. Offen has over 20 years of experience and has helped over 8,500 individuals and families go through the Bankruptcy process. These filings have included stopping foreclosure on a home, stopping repossession of a car or vehicle, stopping IRS tax levies and frozen bank accounts and putting a stop to; lawsuits, credit card bills, personal loan, bills, utility shutoffs and other types of debt. With Mr. Offen’s help, these families have saved countless millions of dollars of debt. David enjoys getting to know his clients and will be happy to answer any and all questions you may have. You are treated as a person and not a number. Remember – there is no such thing as a silly question. Don’t be afraid to ask any questions you may have. David M. Offen has found that people looking to file Bankruptcy are not trying to avoid their responsibilities but rather to make a difficult situation easier. David enjoys getting people to stop worrying and making their financial lives much better and stop feeling overwhelmed. In some cases, Bankruptcy is not the best move and he can review your situation with you and tell you the right move for you to make. Get a completely free evaluation of your situation. For the past 20 years, the Law Offices of David M. Offen has been among the top filers of bankruptcy in the Eastern District of Pennsylvania. The Law Offices of David M. Offen 215-625-9600 www.getfreeofbills.com The Curtis Center 601 Walnut Street, Suite 160 West – 1st Floor Philadelphia, PA 19106