2020 has been a difficult year for many of us, which has made money extra tight this holiday season. This is especially true if you have fallen behind on your mortgage payments. If you are worried about foreclosure, you want to move quickly but also safely. We also want you to be armed with the most information possible, as there are those that prey upon people facing foreclosure. In fact, 9 individuals were recently indicted for this exact scam. So, we have some information to help you understand the foreclosure process and avoid scammers.
When Does Foreclosure Begin?
This process typically begins after falling behind on mortgage payments. If you are only a few days behind, you will likely only be charged a late fee. If this continues beyond 30 days, your loan will go into default. Your lender will next prepare to sell the home at auction.
What is the Foreclosure Timeline?
Once you receive a Notice of Default Recorded, the foreclosure timeline has officially begun. Meaning, you have approximately 120 days until your home is sold. It will either sell at auction or the bank will take ownership of the home.
By day 90, a Notice of Trustee Sale is prepared. Also, an auction date can be set as soon as 21 days later. At day 100, the Notice of Trustee Sale is published. Approximately 2 weeks remain to cure default and stop the foreclosure. Any money collected through the auction is then applied to the mortgage balance.
Can Bankruptcy Help?
Yes. Once your bankruptcy is filed, an automatic stay begins. The automatic stay is a court-ordered injunction that helps to protect you from creditors. It also legally allows consumers to retain their properties while working out a resolution for their debt.
Chapter 7
If your home has already been scheduled for foreclosure, filing for Chapter 7 will legally postpone the sale while your bankruptcy is pending. A trustee is appointed to sell off assets not marked exempt. So, the resulting money is used to repay your creditors. With the automatic stay, the trustee has time to sell off your property instead of foreclosing. For more information on how Chapter 7 works, click here.
Chapter 13
You are able to restructure your debt and save your home through a Chapter 13 plan. You are given a three to five year period to resolve your delinquent accounts. During this time, you will also be able to pay arrearages on your mortgage loan. Your mortgage company is required to provide transparent accounting. They must provide a report to show that all arrears have been paid through your bankruptcy.
Why You Should Not Wait
Taking fast action is key! In California, it is possible to foreclose on a property without an actual court proceeding. However, these types of foreclosures will typically begin with a recorded Notice of Default. Please take time to research the person or firm you place your trust in. Do not be a victim of a foreclosure scam! Speak with a qualified bankruptcy attorney as soon as the Notice of Default is served to maximize your options.
Need Help?
At the Law Office of Daniela Romero, we believe in relationships that are based on trust. Before we work together, we would like to get to know you and we would like you to get to know us. We want you to be sure you are the right fit for us and that we are the perfect fit for you. This will allow you to be completely comfortable sharing intimate and difficult details of your case, so we can offer you representation to the fullest extent of the law. Call us today to set up a free consultation.