What is Foreclosure?
A San Francisco bankruptcy attorney discuss foreclosure...
What is foreclosure?
A foreclosure happens when the lender retakes possession of the home, which was the collateral for the mortgage. Generally this occurs when the borrower has defaulted on the loan and is unable to work out an agreement with the lender. To protect its interest, the lender will retake the home and try to sell it to cover the outstanding balance.
Can I stop a foreclosure?
There are several ways to stop a foreclosure. One is to pay the default amount – generally equal to the number of missed payments plus some late fees. Some lenders will not accept the default amount and require the entire loan balance due in order to remain in the home. If paying off those balances is not a viable option, declaring bankruptcy can prevent a foreclosure. When an individual files for bankruptcy an automatic stay goes into effect, preventing the sale of a home or the bank taking repossession of the home.
Can I remain the home after it has been foreclosed?
That generally depends on what the lenders plans are and whether it was sold at the trustee sale. It is often possible to prolong the amount of time you can remain in a home after defaulting on your mortgage but it is difficult if the bank gets the Sheriff involved. Going through an unlawful detainer process is not simple and can make finding a new place to live difficult.
What if I cannot afford my home but don’t want a foreclosure?
You should ask you lender if they do a “cash for keys” exchange. That is basically just letting the lender know you cannot afford to remain in the home but want to leave without any issues. If you surrender your keys to the lender they will often pay you to help cover certain moving expenses. This is done to protect the lenders interest in the property.
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