If you’re facing situation involving a home foreclosure in Colorado Springs, be sure to seek proper legal advise and talk to a bankruptcy attorney at Maceau Law. Read the information below to learn what home foreclosure is, what your options are, and when it’s appropriate to seek legal assistance:
A home foreclosure is the legal process in which a owner’s rights to his or her property become terminated. The process usually involves a forced sale of the property at a public auction. The proceeds from the auction are then applied to the mortgage debt. Currently, there are 4.8 millions homes in the United States facing foreclosure. Some of these foreclosures will not go through as the owners will work with lenders to prevent foreclosure. However, according to the Mortgage Bankers Association, last year around 500,000 homeowners went through the home foreclosure process.
What does the process of home foreclosure entail?
The process of foreclosure usually begins with an official demand of payment. This is often in the form of a letter sent by the lender. This letter is referred to as a letter of notice or a default notice. Each state varies in its allowed delinquency period. However, in most cases, homeowners have to be at least three months behind on mortgage payments to receive a default notice. Each state uses either a deed of trust or a mortgage foreclosure as the legal way to secure a property.
A mortgage foreclosure begins with a search for the property title report being ordered. The report could include information about holders of government tax liens, judgment holders and liens along with others who are interested in the property in question.
After this point, a Lis Pendens is issued on the property in question. A Lis Pendens is also referred to as a legal action that is pending. This action notifies the community of the pending legal action regarding the property. In most cases, the Lis Pendens is filed by the lender’s attorney.
After the filing of the Lis Pendens, an announcement is posted in at least three areas accessible to the public and on the property itself. The individual facing foreclosure is informed of the legal action and has 15 to 20 days in which to respond. If the homeowner does not respond, the lender’s attorney submits a report that informs the homeowner of the delinquent amount due including legal costs.
At this point, a default judgment of home foreclosure is issued by a judge, and a court date is scheduled. Court takes place, and a judgment is rendered. Usually, an appointed official or a referee is told to proceed in selling the property. Of course, the homeowner can respond at any point during the process and prevent the foreclosure from going through by paying the amount owed to the lender.
Deed of trust foreclosure process:
When issuing a deed of trust, a trustee is obtained to oversee a foreclosure. The trustee takes the place of a judge and allows the court to be bypassed entirely. The trustee issues a default notice and informs the property owner. After this time, the homeowner has 90 days to pay up the loan in order to prevent the home foreclosure. If the homeowner does not take action within the appointed time, a Sheriff’s sale will take place.
Why does foreclosure happen?
The reasons behind a foreclosure are vast. For example, a death, terms of a loan, medical issues, a divorce or unemployment are just some of the reasons that homeowners default on their mortgage payments. With the current economic crisis facing the country, more people than ever before are finding themselves without a job and subsequently without a way to pay their bills. This situation has resulted in above average numbers of homeowners facing foreclosure.
How can homeowners avoid foreclosure?
There are three main ways that homeowners who are struggling to make pay their monthly mortgage payments can avoid foreclosure. They are as follows:
Homeowners can sometimes renegotiate their mortgage interest rates in order to lower their monthly payments. This is a great way to keep a home from going into foreclosure.
- Loan modification:
The Home Affordable Modification Program is offered by the federal government as a way for homeowners to avoid foreclosure by reducing their monthly mortgage rates. The program awards banks who offer loan modification to their customers. These modifications can turn a 15 year mortgage into a 30 year mortgage thus lowering the monthly mortgage payments.
- A short sale:
Another alternative for homeowners to consider when they are facing a foreclosure is a short sale. A short sale allows the homeowners to sell the home for less than they owe by having the lender agree to the arrangement.
Is it necessary to hire an attorney when facing foreclosure?
Each foreclosure case is unique. However, many times, it is helpful for homeowners who are facing foreclosure to hire an experienced attorney who can inform the homeowner of their legal rights. Homeowners who seek legal counsel are more likely to avoid foreclosure than those that do not seek legal advice. When homeowners face the legal action of foreclosure, it can be very overwhelming and humiliating. However, a great attorney can help a homeowner through this tumultuous time and help them fight to stay in their home.
We can help you with home foreclosure in Colorado Springs, Pueblo, and Castle Rock areas
Contact us at Maceau Law to talk to one of our bankruptcy lawyers in Colorado Springs about your home foreclosure situation. If you need legal help, we have the experience to make sure you’re treated fairly and properly. Call 719-633-2222 to schedule a consultation.