Foreclosure Law 101 For Homeowners

Foreclosure laws vary from state to state but here is some general information about foreclosure laws. When a person falls behind on their mortgage payments and they have defaulted on their debt, the bank may foreclose on their property.

The bank does this by filing a lawsuit in order to get a court order to foreclose. Once the court declares foreclosure on the property, they auction it off, with the highest bidder purchasing the property. There is a waiting period between the date of the lawsuit and the foreclosure sale, which is often between three and twelve months depending on the foreclosure law in the state.

They publish a foreclosure ad according to foreclosure law at least thirty days before the auction, once a week for up to three weeks. Before they place the first ad, the homeowner must receive a sheriff’s notice of foreclosure sale. Immediately after the sale, the sheriff gives the title/deed to the new owner.

If you have fallen on hard times and missed some mortgage payments, there is still a chance to save your home especially if you have not received a foreclosure notice yet. Return all phone calls and answer any letters regarding your home. Go in and talk to the lender or bank. Often they would much rather work with you instead of foreclosing on your property.

Hiring an attorney familiar with foreclosure law is often a wise move as they can not only act as intermediary at this very stressful time and protect your rights but also work with you on saving your home from foreclosure.

You may be able to pay some of the missed payments and/or set up new monthly payments. At times, the bank will even allow you to refinance to reduce your monthly payments. As mentioned earlier, banks really do not want to foreclose on a home if they do not have to. Ask questions, seek help on foreclosure law and be aggressive about keeping your home.

Vermont Foreclosure Laws

Vermont is a strict foreclosure state. That means that foreclosures in this state proceed on the premise that the lender owns the home, not the borrower.

So, if the borrower transgresses on any condition in the mortgage before the loan is paid in total, they will lose all right to be in the home. The lender will take hold of the property and set up the auction.

The first step in this state is; the borrower /homeowner must be served a summons to appear in court and there be apprised of his or her rights in the case. At this time, the lender can request a summary judgment. This, if granted, will by pass a trial completely.

Virginia allows both in court and out of court foreclosures. Even when there is a power of sale clause in the mortgage or deed of trust, the lender can proceed either with judicial, in court foreclosure or a non judicial out of court foreclosure.

If the lender chooses to go for the in court foreclosure, they must first file a complaint in court and receive a decree of sale. The occasions when this type of foreclosure is required, is when the property includes a dwelling of two units or a building that has less than two units . The owner must be utilizing this as their principle residence. Another rule that applies to this form of foreclosure is that the property cannot be sold until after seven months following the granting of the decree of sale.

Vermont allows for out of court foreclosure when, again it is not a 2 unit or less dwelling with owner residing in one of those units as their primary home or farmland. If these conditions are met, then the lender can sell the place without either a formal foreclosure proceedings or bothering to get decree of sale.

This is how the sale would proceed, at a minimum of thirty days before the advertising of the notice of sale , a letter called the notice of intent to foreclose, must be sent to the home owner by registered mail. This must be sent to their last known address. This letter must contain a description of the condition in the mortgage that the borrower has not honored. It must also explain the lender’s right to accelerate the mortgage (call it due in full) This letter must state that the homeowner will receive a notice of sale, no sooner than sixty days before the sale date.

At anytime before the sale , the borrower can “buy back” the home and avoid foreclosure by paying the total amount of the mortgage plus attorney’s fees and other lender expenses.

If and when the sale date does arrive, it will be held on the property itself. Sometimes the court will designate some other location. The property will then be sold to the highest bidder. Anyone, including the lender, may bid. If there is not enough money from the winning bid, to pay off the amount owed, then the lender has the right to continue to pursue the borrower for the additional money. They will do this through a law suit.

In Virginia, if the mortgage was initiated after 1968, the home owner has six months to regain ownership of the property. If the home has a mortgage that was entered into before 1968, then the home owner can “buy it back” for a full 12 months after the sale.

The cost of the option to the home owner is the highest or winning bid amount at the auction plus interest.

Vermont is a strict foreclosure state. That means that foreclosures in this state proceed on the premise that the lender owns the home, not the borrower.

So, if the borrower transgresses on any condition in the mortgage before the loan is paid in total, they will lose all right to be in the home. The lender will take hold of the property and set up the auction.

The first step in this state is; the borrower /homeowner must be served a summons to appear in court and there be apprised of his or her rights in the case. At this time, the lender can request a summary judgment. This, if granted, will by pass a trial completely.

Virginia allows both in court and out of court foreclosures. Even when there is a power of sale clause in the mortgage or deed of trust, the lender can proceed either with judicial, in court foreclosure or a non judicial out of court foreclosure.

If the lender chooses to go for the in court foreclosure, they must first file a complaint in court and receive a decree of sale. The occasions when this type of foreclosure is required, is when the property includes a dwelling of two units or a building that has less than two units . The owner must be utilizing this as their principle residence. Another rule that applies to this form of foreclosure is that the property cannot be sold until after seven months following the granting of the decree of sale.

Vermont allows for out of court foreclosure when, again it is not a 2 unit or less dwelling with owner residing in one of those units as their primary home or farmland. If these conditions are met, then the lender can sell the place without either a formal foreclosure proceedings or bothering to get decree of sale.

This is how the sale would proceed, at a minimum of thirty days before the advertising of the notice of sale , a letter called the notice of intent to foreclose, must be sent to the home owner by registered mail. This must be sent to their last known address. This letter must contain a description of the condition in the mortgage that the borrower has not honored. It must also explain the lender’s right to accelerate the mortgage (call it due in full) This letter must state that the homeowner will receive a notice of sale, no sooner than sixty days before the sale date.

At anytime before the sale , the borrower can “buy back” the home and avoid foreclosure by paying the total amount of the mortgage plus attorney’s fees and other lender expenses.

If and when the sale date does arrive, it will be held on the property itself. Sometimes the court will designate some other location. The property will then be sold to the highest bidder. Anyone, including the lender, may bid. If there is not enough money from the winning bid, to pay off the amount owed, then the lender has the right to continue to pursue the borrower for the additional money. They will do this through a law suit.

In Virginia, if the mortgage was initiated after 1968, the home owner has six months to regain ownership of the property. If the home has a mortgage that was entered into before 1968, then the home owner can “buy it back” for a full 12 months after the sale.

The cost of the option to the home owner is the highest or winning bid amount at the auction plus interest.

Understanding Foreclosure Laws – An Important Key to Avoid Florida Foreclosures

It is not surprising that Florida is now one of the states in the US with the most number of foreclosed properties. The growing number of foreclosures in Florida can be attributed to the great rise of real estate in this region wherein, the amount of any average home is $299, 900, which is very high. Because of this too large value, people turn out into buying foreclosures because there are a number of institutions that offers properties that can be bought 10%-50% less than the original price of the property.

Some other factors that cause the increase number of Florida foreclosures are increase in the property taxes, the high costs of insurance and the enforcement applied to the homeowners to sell their properties. The number of foreclosures is getting significant same with the percentage of distressed homeowners who are trying to avoid this thing, yet some do not have the clear understanding and right conception on how to get away with this situation.

Generally, this is how foreclosure occurs.

Once the borrower defaults to correct the monthly payments to the bank or creditor, he/she will be informed by the lender with a given Notice of Default (NOD). The reinstatement period now begins and if it is not still settled for the given period, the lender may issue Notice of Sale. The property is now open for auctions. When the highest bidder has successfully bought the property, the property can be said to be foreclosed.

However, the process of foreclosure differs in each state. As we go through Florida Foreclosure Laws, we will be able to assess the root causes of the growing population of distressed homeowners in Florida.

To avoid Florida Foreclosures, you may take a moment in these important facts about Florida Foreclosure Laws:

  • Florida is a judicial state. That being said, foreclosure may just happen if the lender decided to file a suit against the borrower.
  • It takes around six months for the proceeding to get through.
  • In Florida, when the auction is over, the borrower’s right of redemption ends automatically. Unlike other states, there is no grace period that will allow the homeowner to get caught up, unless otherwise expressly provided by the court.
  • Only the primary borrower gets the Notice of Sale and the co-borrowers are not given the notice.
  • If the bidder is able to obtain the highest bid, the lender will inform the court about it and there will be a maximum of 10 days to evaluate if the price paid is best under the circumstances.
  • The injunction against the sale is not possible unless there was an error made in the foreclosure procedure, even if the property was sold at a low price.

Texas Foreclosure Law Primer – Part 2

So you are a Texas home owner and you received a foreclosure posting – what do you do next?

This article is the second in a series of articles designed to help Texas home owners who face the threat of foreclosure.

Texas is a non-judicial foreclosure sale for non Texas equity mortgages. That is, the Trustee can conduct the sale on behalf of the lender without any court intervention. This means that the foreclosure time line is accelerated and can be completed well within 60 days if the calendar fall right.

Texas equity loans do require a court order and that process is longer.

Texas law provides that your mortgage lender must adhere to certain notice requirement contained in Texas Property Code, Section 51.002. The notices in Section 51.002 are keyed to the status of the property as a residential property, as opposed to a non-owner occupied property. Properties that serve as a primary residence receive an additional 20 day notice to cure.

While these tips are designed to Texas home owners, its helpful to home owners in other states as well. Home owners in states other than Texas are cautioned to consult their own state law.

You’re now on the clock. You must take action. This is one of those times you need to speak to someone – a confidant, a trusted family member, an attorney, a CPA, a minister – someone that will listen to you and help you through this difficult decision.

Emotions seem to taint a lot of real estate decisions. You need to speak with someone so you can bounce ideas off of them, listen to their feedback. Believe it or not, the decision you make here may not also save your home, but you may be able to save some money in the process. Each day you delay cuts down on your options and increase the costs of that decision.

Key Point 1 – Calm down and understand that you can salvage the situation. You’ve got some difficult decisions here but you can take of this situation.

So what are some of the options you should be considering?

Try to work something out with you lender.

Key Point 2 – Anything you agree to with your lender must be in writing. Do not believe a phone representative’s claim that the foreclosure will be stopped if you make a payment. It will not be stopped and you’ll lose the opportunity to save this situation. Don’t trust the lender in this situation.

File an Application for a Temporary Restraining Order

Key Point 3 – Assuming you have no other financial problems, this may be a consideration. But, the legal fees are expensive and you must provide a bond to the court. More importantly, there is no guarantee that your application for a Temporary Restraining Order will be granted. This risk-reward payoff here is not good. Texas judges are more likely to rule that bankruptcy court is a more proper forum for this action.

File Bankruptcy.

Key Point 4 – Absolutely the best option available for most people. Just get you case filed. It will give you at least 60 days breathing room, even if you filing is kicked back for some reason. It also seems to get the attention of the lender to allow you to work some out with them.

Do nothing and abandon you home.

This sounds harsh but it may be the right thing to do if you have no equity in the property. Save your money and lock up a rental before the foreclosure.

Key Point 5 – Lenders are not pursuing deficiency judgments now. Take care of your old home, don’t remove fixtures, clean it up, and make it easy for the lender to take over the property.

Under Texas law, lenders have the option of pursuing a judgment, if they so desire. This is not happening with regularity right now, but it is something that you should be aware of.

Also, under Texas law, a foreclosure of a Texas equity loan is judicial process. Also keep in mind that there is no personal liability on a Texas equity loan.

You may receive a 1099 from the lender for forgiveness of the debt. Consult with a tax professional to consider the impact on your personal return.

Foreclosure is a tough process for your entire family. Educate yourself as to your options.

Nebraska Foreclosure Laws

Nebraska is one of the states where foreclosure must be followed through a judicial or in court method. The process begins when the bank files a law suit called a complaint with the court against the homeowner who is having trouble making his payments. The objective of this lawsuit, is to get the court to officially declare the homeowner in default. When this has been accomplished the process of moving toward the sale of the house can begin. The court will decree the amount that the homeowner must pay and give them a short time frame in which to pay that money. If the homeowner cannot do this, the clerk of the court will issue an “order to sale” and then advertise the sale of the home. In some cases Nebraska allows for a portion of the property to be sold off to satisfy the debt.

After this judgment or official declaration of default has been made by the court, the sale date or order of sale can be delayed as much as an additional nine months. To accomplish this, the home owner must file a written request for a delay with the clerk of the court. This request must be filed within the first twenty days following the courts decision to find the homeowner in default. If this request for delay is not filed within these first twenty days, the order commanding the sale of the property will be issued by the clerk of the court. At anytime during this lawsuit, the homeowner may cure the default by coming up with the total amount of the delinquent payments and all costs and interest that have accrued up to the time that the money is paid. If the homeowner has cured this default and then goes into default again at some time in the future, the court can enforce the decree of foreclosure and sale. In other words the original decree of foreclosure and sale remain in affect and the bank can proceed with a sale of the home without getting another court ordered sale date.

Should the sale of the property still be moving ahead, the place and time of the sale must be publicly posted by the sheriff of the county where the home is located. This notice of sale, must be physically posted on the door of the court house of the county where the home is located. This same notice must also be posted in five other public places in this same county. This notice of sale must also be advertised or published in a newspaper with general circulation in the county where the home is located. This ad must be run once a week for four weeks, leading up to the scheduled sale date.

When the sale finally takes place, the court is required to confirm the sale. The former homeowner has no right of redemption in Nebraska. This means that once the home has been sold at auction, the former homeowner has no time frame in which to regain ownership of the property.

Deficiency judgments are not permitted in Nebraska. Deficiency judgments allow a bank to seek more money than was generated from the sale of the home. If the amount of the highest bid on the house is still less than the amount of the loan, the difference between the two amounts can be sought from the former homeowner in states that allow deficiency judgments. This option is not available to banks in this state.

A typical foreclosure time line in Nebraska, from beginning to end is 180 days.

There are is always the possibility to stop foreclosure.