A Letter of Foreclosure: What Does it Mean?

Are you facing foreclosure?  Have you received a certified foreclosure letter sent from a lender or attorney?  The letter typically means that you have fallen behind on your payments and the lender plans on pursuing foreclosure proceedings to sell off the property to gain back the late payments and the balance owed on the mortgage.

However, there are a series of legal milestones that must take place. Within the Notice of Default, you will find solutions that cover your past-due payments. If you do not solve the past-due amount, then you must leave your residence. Normally the letter states that the foreclosure will officially start in 10 days so you must act fast. If you can pay your missed payments and all interest within that time period, then you are encouraged to do so immediately to halt the process.

The Next Step After the Letter of Foreclosure

If you are unable to pay your back payments, then the lender will file a lawsuit. You will be given a summons and time to respond (from 15 to 30 days depending on the state). If you want to stop your home foreclosure, then it is imperative that you respond promptly, or a default judgment might be entered for the lender. If you respond, then you can make a presentation to the judge that illustrates why you should keep your home.

Understanding Foreclosure

A foreclosure means that the creditor has the right to repossess and sell your residence to repay the amount owed. A lender can foreclose if the borrower misses their payments. Please remember, state laws do vary, but in general the following outlines the process of foreclosure.

  • A certified letter of foreclosure details the default and explains that you have fallen behind on your payments.
  • A time period is given for how long you to pay the past due payments. This includes all penalties, interest, and attorney fees.
  • The lender has the right to go forward with a judicial foreclosure (state laws vary) or they can have a non-judicial foreclosure. In some states allow both.
  • If the time frame has passed and the default has not been cleared, then the lender can give a notice of a foreclosure sale.
  • The property is publicly auctioned. In some cases, the lender purchases the property at the auction to resell it at fair market value in a private sale.
  • The lender will file an unlawful detainer suit to officially evict the property owner if he has not vacated the premises.

Ultimately, the length of time involved in a foreclosure varies. State laws must be considered. The process often takes three to six months from the first missed payment. 

Stop the Foreclosure Process

If you have received a Letter of Foreclosure, then please remember that you do have options. You can contact our office for a free consultation on your options.

Related Information: 6 Foreclosure Defenses for MA Homeowners

Deed in Lieu 

When you receive the foreclosure letter, you are not obliged to move out immediately. In some cases, you can choose a deed in lieu of foreclosure where you must voluntarily give up your home to save your credit report from showing a foreclosure. You give the lender a deed in lieu of foreclosure so you can move out of your home and face no further financial obligations to the lender.

Will A Foreclosure Wipe Out All Debt? 

This is a common question asked by those facing foreclosure. The foreclosure will only wipe out some of your debt such as the mortgage, any home equity loans (HELOCs) and second mortgages. However, if enough money is not gained when the house is auctioned in foreclosure then you must still pay off your HELOCs and any second mortgage amounts still owed. Often the real estate prices have plummeted, so the property ends up being sold for far less than the amounts owed. If this happens, the court can enter a delinquency letter for the amount not paid. As the property owner, you will be obliged to pay the difference. The lender will also have the right to obtain the balance from other assets that you own.

Your first step of action must be to seek legal advice as soon as you receive your Letter of Foreclosure. Our office specializes in foreclosures and will outline your options. We are here to help you, call the Oberhauser Law firm to help save your home at 978-452-1116.

Attorney Gregory Oberhauser

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Gregory Oberhauser is the ONLY attorney in Massachusetts to be distinguished as an ACS-CHAL Forensic Lawyer-Scientist by the American Chemical Society!

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