A delinquency occurs in mortgage payments – What needs to be known.
- One can always bring their payments current at any time up and till the entry of a judgment of foreclosure. Delinquent payments plus costs, expenses and legal fees, if any. This is known as Reinstatement.
- Typically, a lender will not commence any legal proceedings (aside from required notices) until the loan is three or more months delinquent.
- There is the absolute ability to pay off and satisfy the loan at any time before an auction sale is held.
- Just because the loan becomes delinquent and one or more payments are behind or a foreclosure action was commenced one does not need to vacate or leave the premises.
- In fact, it is best to continue to maintain the property so it is not vandalized or falls into disrepair.
- No eviction proceedings may be maintained just because the property is in foreclosure.
- Only after a foreclosure auction is held can there be eviction proceedings. This is because either the lender or a bidder at sale now owns the property.
- Many lenders have modification programs. Contact the lender for more information on the ability to modify a particular loan.
- In New York, most foreclosures take more than a year until there is a court scheduled auction date. In many cases the legal proceedings linger for years.
- Most importantly, and this can not be stressed enough, – a distressed property, one with a delinquency in mortgage payments or actually in foreclosure, can always be sold and the mortgage loan and liens satisfied up until the “gavel falls” at a court scheduled auction sale.
- In this scenario – the homeowner is still entitled to all of the remaining equity in the property.
- Even after an auction sale and the homeowner is no longer the owner they still may be entitled to monies if A: they timely make application and B: the bidder pays more for the property than all of the liens and costs against the property.
Early on, the homeowner should do a financial analysis as to the potential of being able to reinstate the mortgage loan or maybe modifying the loan with the lender. Possibly, there is the potential for a lump sum of monies from a legal settlement etc., that the homeowner knows will be coming in the near future.
However, if the homeowner sees that there is no future ability to be able to make the required payments they should quickly come to the realization that the best possible scenario is to put the property for sale with an experienced foreclosure Realtor. If this is timely done there will be more than enough time to properly market the property and hopefully due to the recent surge in market prices be able to retain some equity from the property.
Even, if there is no equity in the property this should not dissuade a homeowner from still marketing the property. This would be a short sale and the numerous benefits of a short sale, which are more fully discussed on our website @ https://www.theforeclosurebroker.com, would, in so many cases, make good financial sense.