No one wants to receive a notice of foreclosure from their bank, but if you have, it’s important to understand that you have legally guaranteed rights and that there are still ways you can protect your property. Here are some of the key strategies for preventing foreclosure, and how an experienced foreclosure defense attorney in Minnesota can help you fight for what’s yours.
Understand the Foreclosure Process
The foreclosure process timeline begins with several months of missed mortgage payments. Some mortgage lenders will reach out to homeowners after a couple of missed payments to discuss the homeowner’s situation and offer assistance programs. However, after continued nonpayment, the lender may send a notice of default advising the homeowner of their intent to foreclose. The lender may have to seek a court action unless the mortgage includes a “power of sale” clause. After filing a “notice of pendency” and publishing a notice of sale, or after obtaining court approval if required, the lender will conduct a foreclosure auction.
Homeowners have options for stopping the foreclosure process before the lender finalizes the foreclosure sale. However, the earlier a homeowner acts after missing mortgage payments, the more options they have for avoiding a sale of their home.
Communicate with Your Lender
One of the most critical practices to follow when facing foreclosure is to maintain consistent communication with your mortgage lender. Homeowners should not ignore missed payment letters, phone calls, or notices of default. Most lenders offer pre-foreclosure programs that help property owners get back on track with payments and avoid the need for foreclosure.
Lenders may offer a forbearance program in which they temporarily pause mortgage payments, although the homeowner must make up those payments at the end of the mortgage term. This option can help homeowners who may miss payments for several months due to loss of employment or medical emergencies. Lenders also frequently offer loan modification programs under which they negotiate new loan terms, such as reduced interest rates or extensions to the mortgage term, to make monthly payments more affordable.
Maintaining open communication with your lender can demonstrate your good faith in attempting to catch up on your mortgage payments, which could delay the lender’s efforts to pursue foreclosure relief.
Explore Government and Nonprofit Assistance Programs
Various government and nonprofit programs can help homeowners resolve financial issues with making mortgage payments. The Homeowner Assistance Fund, HUD, and nonprofit housing counselors can help develop monthly budgets and negotiate with lenders to pursue forbearance or loan modification.
Consider Legal and Financial Alternatives
Depending on the homeowner’s equity in their property and their current credit, they may qualify for refinancing to pay off past-due balances and access lower interest rates. Homeowners may also negotiate repayment plans with lenders to pay off arrears over time. More drastic legal alternatives to foreclosure include conducting a lender-approved sale of the property to pay off the mortgage or offering the lender a deed in lieu of foreclosure. Finally, homeowners in severe financial distress might consider filing for Chapter 13 bankruptcy, which can halt foreclosure proceedings due to the automatic stay and allow homeowners to catch up on missed payments.
Before choosing a strategy to protect your home from foreclosure, you should speak to an experienced attorney about the available avenues and the pros and cons of various approaches.
Contact a Foreclosure Defense Attorney Today
Is the bank trying to foreclose on your home? If so, you deserve committed legal help to protect what’s yours. Contact Christensen Law PLLC today for a confidential consultation with one of our real estate lawyers, who can advise you on your options for saving your home in the face of foreclosure.
