Foreclosure FAQ's

There are several notices forwarded to you, the homeowner, at various stages of the foreclosure process. The number of notices and their scheduling varies according to jurisdiction and state. The whole process takes several weeks, sometimes months.

It is rare that upon the completion of a foreclosure sale a homeowner is able to recover the home. Some states provide redemption periods to reclaim the property by paying the entire debt within a certain time frame. In states without redemption periods, the mortgage company or the highest bidder takes immediate possession after the sale.

If the lender/servicer did not recover the money owed from the sale of the property, you may be liable for the balance due and any outstanding property taxes. Again, this varies from state to state. If the property sells for more than what is owed on the property, you may receive some money back. But you may still be responsible for the taxes.

Aside from losing the home after a foreclosure sale, you now carry the burden of the foreclosure on your credit record.

Remember, there are certain forms of bankruptcy designed to help keep you in your home should you find yourself in financial difficulty. Consult with a professional legal advisor to make an informed decision.

Q: How do I know if I qualify for any of these alternatives?
Q: Is there anything I should be particularly aware of?
Q: What can I do to protect myself?
Q: What are the most important things for me to remember?

Q: How do I know if I qualify for any of these alternatives?
A: Take the time to discuss these options with your lender. Your lender will determine if any of these options apply to your specific need. You can also contact a housing counselor to discuss with you and your lender the various options and together you can decide which meet your needs. Call 1-866-716-3633 to contact the AHAA Home Retention Program. Or contact a HUD housing counseling agency nearest you at 1-800-569-4287 or TDD 1-800-877-8339.

Q: Is there anything I should be particularly aware of?
A: Yes. Don't be ripped off! The only way to save your home is to work with your lender. There may be third parties that try to offer you quick and easy solutions to your delinquency problems. If you try to sell your home without the help of a real estate professional, watch out for buyers that want to rush you through the process. You may find yourself in an even worse situation.

As a homeowner, it is important to remember that your lender, and only your lender, can make a final decision on what you can do to avoid foreclosure. You can work with your lender directly. Paying someone else to do this for you can be a waste of time and money. If someone approaches you and offers you a quick solution for some money upfront, please contact your lender before signing any papers or agreeing to sign over your deed. Even if you do sign over the deed, you may still be responsible for making mortgage payments to your lender.

Equity Skimming- The person or people that attempt to do this may have learned about your current financial situation and may be trying to make some quick cash. Equity Skimming is an illegal scam. If you are approached by someone who wants to buy your home so you can avoid foreclosure, beware of equity skimming. This person may want you to move out of your home quickly and ask you to sign over the deed. Even if you sign the deed over, you may still be responsible for making payments to your lender. The buyer may attempt to collect rent on your property for a period of time without ever making a payment to your mortgage company.

Phony counseling agencies- There are some groups around that call themselves counseling agencies. These groups will ask you to pay a fee so that they can contact your lender and work out your financial situation. This is something that you can do on your own. Again, it is important to remember that the final decision on your foreclosure is up to your lender. It is also important to remember that HUD requires your lender to explore all options before foreclosing.

Q: What can I do to protect myself?
A:

  • Contact your lender as soon as possible. Time is of the essence. It is important to remember that your lender doesn't want to foreclose on your home. Everybody loses in this situation. You lose your home; your lender loses thousands of dollars and they may be penalized by HUD.

  • Before you sign or agree to anything, contact your lender.

  • Make sure that if you are working with someone that you get any and all promises in writing.

  • Do not get into any contract of sale or agree to let someone take over your loan, unless you will be formally released from your obligation to repay your loan.

  • Consult with a lawyer, a real estate professional or your mortgage company before you agree to a deal involving your property.

  • If you are attempting to sell your home, do some research on the borrower to make sure that there aren't any complaints against him/her. Your state's Attorney General, the State Real Estate Commission, or the local District Attorney's Consumer Fraud Unit can give you this kind of information.

Q: What are the most important things for me to remember?
A:

  • Losing your home can seriously damage your credit and will take years for you to repair. Your main priority should be keeping your home.

  • Do not ignore letters from your lender. The faster you contact them, the more likely you are to keep your home.

  • Do not abandon your home. There may be a chance for you to save it. It is up to you to take the necessary steps to ensure that you avoid foreclosure.

  • If you are working with a counselor or your lender, take advantage of the assistance that they are giving you and be as helpful as you can so that all parties can come to a resolution and you can avoid foreclosure.

  • If you feel like you're being scammed contact your lender or a counseling agency, like AHAA, for assistance.

  • Do not get into any agreements or sign any documents that you do not fully understand.

Time is of the essence, don't waste it!! If you are not pro-active, you could lose your home and your good credit rating.

For more information about AHAA's Home Retention Program contact us at 1-866-716-3633.

Additional Foreclosure Resources for Consumers