When a homeowner gets behind in their mortgage payment, the lender may start the foreclosure process. If the mortgage is not paid, the lender will take possession of the collateral used against the loan, in most cases, it’s your home. The foreclosure varies by state, taking anywhere from one to seven months to complete the process. Bankruptcy is an option to stop the foreclosure process and gives you time to catch up on your payments and keep your home.
While rare, a lender can start foreclosure proceedings as early as the first missed payment. Other lenders will send a friendly reminder that you missed your payments and remind you of the late fee. The second missed payment will generate more phone calls and a strongly-worded letter warning you that foreclosure proceedings could begin. If you miss a third payment on your home loan, you will generally get an official letter notifying you that the foreclosure proceedings have begun.
Work With You
The mortgage lenders may try to work with the borrowers to avoid foreclosure. If they still do not receive payments, the lender will have no choice but to start procedures to save their investment. Foreclosures often cost the lenders between 20 to 60% of the loan value, giving them a strong incentive to work with the borrowers.
There are two types of foreclosure one through the courts and the other without. If your foreclosure is handled out of the court system, it is probably because you signed an agreement in your contract that the lender has the right to sell the property to recover the missed payments of the loan.
If you are in danger of losing your home to foreclosure or eviction, contact a Dallas bankruptcy attorney to determine how you can stop all legal actions against you to collect on a debt.