What is a foreclosure?
When a homeowner fails to make the payments on his/her mortgage, the lender can begin foreclosure proceedings. This is a very specific legal process with set timelines and outcomes. Ultimately, if the property is foreclosed, the lender takes possession of the property.
What can I do to prevent losing my home to foreclosure?
If you have fallen behind on your mortgage payments, there are options to prevent losing your home to foreclosure.
Homeowners in this situation are encouraged to contact their lender. Borrowers may be offered refinancing based on a new appraisal of the property, which could lower the interest rate and thus establish a lower, more affordable mortgage payment.
Also, it is wise to contact a HUD-approved housing counseling agency for free advice about programs that may be able to assist in preventing foreclosure. In Florida, there are more than 130 HUD-approved counseling agencies. You can find the location closest to you at HUD-approved Counseling Services in Florida.
You may also be eligible for federal assistance through the Housing and Economic Recovery Act of 2008. The legislation includes a HOPE for Homeowners program established to help struggling families stay in their homes. To see if you may qualify, visit the U.S. Department of Housing and Urban Development Web site -- www.hud.gov -- or call the Federal Housing Administration's toll-free hotline: 800-225-5342.
A loss mitigation company contacted me and said they would protect me from foreclosure. Should I trust them?
Unfortunately, there are some unscrupulous agents and for-profit companies who will try to charge you hefty fees for foreclosure prevention advice that you could receive for free from your lender or through a HUD-approved home counseling program. For locations in Florida, visit HUD-approved Counseling Services in Florida.
If you are unsure about someone who has contacted you about foreclosure prevention assistance, you can also contact the HOPE NOW alliance, www.hopenow.com, which provides a 24-hour mortgage prevention helpline at 1-888-995-HOPE.
Most importantly, do not sign ANYTHING authorizing another individual or business to act on your behalf. This is a foreclosure recovery scam that may result in the loss of the title of your home.
If you believe you are a victim of foreclosure prevention fraud, you should contact the Florida Attorney General consumer hotline: 1-866-966-7226.
Would filing bankruptcy prevent foreclosure?
Bankruptcy is only a temporary fix that delays the foreclosure process. Eventually, if the mortgage continues to be unpaid, the home will be foreclosed. If you are considering filing for bankruptcy, you should consult a bankruptcy attorney for more information; however, keep in mind that there may be other options that may allow you to stay in your home.
What is a short sale?
If homeowners are facing foreclosure and don't think they will be able to renegotiate their loan or qualify for federal assistance, they may try to put their property on the market in what is known as a short sale.
A short sale occurs when the balance owed on the property is more than the profit made in the real estate sale. Even though the lender takes a loss, they may prefer this as opposed to foreclosure, which can be an even costlier option for the lender.
What does "pre-foreclosure" mean?
Pre-foreclosure is a marketing term to attract potential buyers to property that is on the market at a significantly reduced price. It is often used in short sales. Use of the term applies to situations in which a Notice of Default (NOD) on the mortgage has been filed, and the owners of the home are trying to sell before they lose it to foreclosure.
If a foreclosure action is brought against a homeowner's residential property, is he or she obligated by law to vacate the property immediately?
Whether an owner must vacate immediately depends on the terms of the mortgage. If the mortgage does not require the owner to vacate the property upon the filing of a foreclosure action, there is generally no express legal obligation to vacate immediately but the answer depends on the facts of each individual case. If and when the court enters a judgment of foreclosure and the foreclosed property is sold at auction, the former owner's right to possession of the property is extinguished and he or she must vacate the property.
Is a mortgage holder allowed to seek a deficiency judgment against a homeowner if a foreclosure sale does not net enough to cover the amount owed under the mortgage?
Whether a mortgage holder may seek a deficiency decree in connection with a foreclosure depends on the terms of the mortgage and whether the mortgage holder has otherwise waived the right to seek a deficiency judgment. If there has been no waiver by the mortgage holder, whether to allow a deficiency decree is within the sound judicial discretion of the court which hears the foreclosure action.
If I lose my home due to foreclosure, will I ever be able to own a home again?
If you have lost your home to foreclosure, it will appear in your credit history whenever you apply for loans in the future. It does not mean that you will never qualify for a homeownership loan again; however, because of your credit history the loan may require stricter standards like making a larger down payment.