You may be unable to afford your mortgage payments when economical troubles strike at home. That does not mean that you need to pack up and depart if the lender initiates foreclosure proceedings. It’s possible to legally remain in your home until the lender sells it as well as the new owner evicts you, which may require a year or longer.
Types
Lenders have the choice of two kinds of foreclosure: judicial and non-judicial. A judicial foreclosure takes the creditor to go to court and convince a judge that the creditor ought to be permitted to sell your residence. A non-judicial foreclosure is faster: The creditor finds you in default, schedules a sale and it’s completed. This sort of foreclosure saves a whole lot of money in legal costs.
Geography
Foreclosure rules vary from state to state, such as what sort of foreclosure the creditor may use and how long the procedure must take. Back in California, non-judicial foreclosures–that the strategy most lenders use–start when the creditor files for default and informs you of the filing. The creditor must then wait three weeks to program a sale; when the 3 weeks are over, the creditor may set the date, which must be at least 20 weeks off. If the creditor does not delay, the entire process takes approximately four weeks. In other nations, you may not receive any notification until the sale has been scheduled, and it could be 15 days off.
Alternatives
Lenders in California that utilize judicial foreclosure do this because they can sue the homeowner for the remaining portion of the money when the foreclosure sale does not pay back the mortgage. That’s not an option in a non-judicial foreclosure sale. In a judicial foreclosure, the lender will inform you of the intent to foreclose, file the case in court and inform you of the filing. You must file a response if you want an opportunity to defend yourself in court; otherwise, the lender will make its instance uncontested. When the court date rolls around, you can create your case. If the judge rules against you, the lending institution will schedule the sale in about 10 days. The judicial procedure usually takes a year, which is why lenders favor the non-judicial alternative.
Considerations
You can take steps to stretch out the foreclosure process some time longer. Filing for bankruptcy can’t stop foreclosure, but an automatic stay is in effect while the insolvency court reviews your situation; your lender can’t waive until the stay is lifted. In California, a Chapter 7 bankruptcy filing could prolong foreclosure by another 3 months. It is also possible to challenge a non-judicial foreclosure in court; this may add a few weeks to the time-line, even in the event that you don’t win.
Benefits
The more the foreclosure process, the better for you. If you are ready to find sufficient cash to settle the back mortgage debt, and interest and legal fees, then you can stop foreclosure much late in the match. In California, for instance, you can redeem your house as many as five days before the sale.