From Fear to Action: 3 Critical Steps When Confronted With Mortgage Foreclosure

Facing mortgage foreclosure is a difficult experience that can put any homeowner in a state of panic. For many people, their home is the most prized asset they own, and the prospect of losing it can be devastating.

However, when you find yourself in this situation, you have to focus on practical steps rather than give in to fear. This blog post highlights three critical steps you need to take to protect your home and move forward with confidence.

1. Understand Your Legal Rights

You need to understand your rights as a homeowner to know what kind of protection you have against foreclosure. Every state has different laws that dictate the foreclosure process, so you need to know what your specific rights and options are.

New York, for instance, has an Anti-Foreclosure Law that protects homeowners from wrongful foreclosure. This law requires lenders to give the homeowner a foreclosure notice 90 days before any legal action is taken. This allows you time to organize your finances and find alternative options. 

2. Communicate With Your Lender

A good lender won't be quick to foreclose on your property. Foreclosing your home can be costly for them and might damage their reputation in the community. Plus, they'll have to deal with the consequences of an empty house becoming a blight in the neighborhood. Therefore, your lender might be willing to work with you if you contact them and explain your situation.

You might be hesitant because you feel embarrassed about your financial situation, but you need to communicate with your lender as soon as possible. Try and be honest and forthright about your situation and explain why it's difficult for you to make payments on time. It also shows that you are proactive in finding a solution to your problem, which makes them more likely to see you in a favorable light.

Your lender may be willing to negotiate if they believe there's a chance for you to make your payments in the future. Your lender might offer you options such as forbearance or repayment plans that can help you stay in your home without losing it to foreclosure.

Forbearance is when the lender allows you to temporarily stop making payments while figuring out a solution. Other options, like loan modifications, can reduce your payments or extend the loan term as you work out a solution to your financial difficulties. But once you have an agreement, stick to it religiously and make timely payments.

3. Seek Counsel

Many people who face mortgage foreclosure feel ashamed or scared and avoid seeking help. They may think they can handle the situation on their own, or seeking help is admitting defeat. But this couldn't be further from the truth.

Seeking counsel can help you understand your options and develop a strategy to move forward. You should seek professional help from an attorney who specializes in foreclosure defense. These lawyers understand the intricate details of foreclosure laws and can help you navigate the legal process.

For example, your lawyer may negotiate with the lender on your behalf and possibly find a way for you to stay in your home. Alternatively, they can help you avoid foreclosure by negotiating a short sale or deed-in-lieu of foreclosure agreement.

A deed-in-lieu of foreclosure is a mutually agreed-upon arrangement between you and the lender. It grants you the option to transfer ownership of your home to the lender in exchange for the release of any outstanding debts. This option can help you avoid the foreclosure process and the damage to your credit that comes with it.

Short sales involve selling your property for less than what you owe on it to pay off the mortgage debt. While this might seem less desirable, it's still better than losing the property altogether.

These options can help you regain control of your finances and move on with your life, but they'll only work if you take the necessary steps to protect yourself. So don't wait until it's too late. Discuss your situation with us at the Law Office of Steven Kurlander so we can help you figure out your best move.