Full question:
My husband and I filed a chapter 13 about 2 years ago. We have not been able to make our house payments and the repayment amount required by the court for the restructure. Our house is now in foreclosure. What are our options now?
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: National
Answer:
Foreclosure is the process where a lender sells a property to recover money owed on a mortgage after the borrower fails to make payments. There are two main types of foreclosure:
- Judicial foreclosure: This involves a court-supervised sale of the property, where proceeds first go to pay the mortgage and then any other lien holders.
- Foreclosure by power of sale: This occurs without court supervision if the mortgage includes a power of sale clause. This type may be subject to judicial review later for title issues.
In some states, if the property sells for less than the mortgage amount, the lender may seek a deficiency judgment to recover the difference. However, certain anti-deficiency laws protect homeowners in specific situations, such as when the mortgage is for a primary residence. For example, in California, if a property is sold through a power of sale, the lender cannot pursue a deficiency judgment.
If you're facing foreclosure, consider these options:
- Loan modification: You may be able to negotiate new terms with your lender.
- Short sale: Selling the property for less than the mortgage balance may be an option.
- Voluntary foreclosure: This involves selling the home back to the lender to minimize credit damage.
Consulting with a legal professional experienced in foreclosure can help you understand your specific situation and options available to you.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.