How to Prevent Your Home from Going into Foreclosure
If you are having trouble making payments on your home these days, you are not alone. A recent report from RealtyTrac, Inc. says foreclosure filings are up 48% from a year earlier. States which have been hardest hit by foreclosures in 2008 include Nevada, California, Arizona, Michigan, Florida, and Colorado.
Adding to these concerns, a new study released this month by Harvard University says the U.S. housing market is the worst in 50 years. The study notes the mortgage market meltdown, steep rise in foreclosures, the decline of new home construction, falling home prices, and mounting job losses have all converged to make recovery from the current real estate climate more difficult in the days ahead.
For homeowners who are on the verge of defaulting on a mortgage obligation, the sooner action is taken to protect a home the better. The following steps could be helpful to avoid a foreclosure:
1) Review the terms of your mortgage or deed of trust. Go over the sections pertaining to default and seek advice from an attorney. There are a number of attorneys who specialize in real estate law who are knowledgeable about the foreclosure process in each state and they are best qualified to advise you on your rights. Some might offer free initial consultations. Additional assistance might also be obtained through non-profit legal aid organizations and/or low cost legal services. Check with the bar association in your state to see what services are available.
2) As soon as you realize you can’t make a payment, contact your lender directly and discuss and weigh all options with them. It might be possible to refinance or modify the terms of your repayment plan. Check to see if your lender offers and if you qualify for a forbearance agreement. This would enable you to postpone payments for a certain period of time without your lender filing a notice of default and initiating foreclosure proceedings against you. If your situation is dire and you realize you won’t be able to make payments for an extended period of time, see if your lender will accept a deed in lieu of foreclosure. Through this process, you will basically deed your home over to your bank or lien holder and can avoid a lengthy foreclosure proceeding.
3) Talk with counselors of national programs such as HOPE NOW. It is an alliance between lenders, credit and mortgage counselors, and investors. HOPE NOW can assist distressed homeowners by providing streamline measures and options to prevent foreclosure. Visit http://www.hopenow.com/ for more details.
4) Proceed to sell your home. You can utilize the services of a real estate professional in your local area or post your property online through any number of for sale by owner websites. Even if you don’t get your asking price, it is possible your lender may agree to a short-sale. This means you sell your property for less than the outstanding balance owed, but your bank or lender agrees to accept the proceeds as full satisfaction for the debt. Not all lenders will accept a short sale and most have certain procedures that must be complied with.
5) As a last resort – file for bankruptcy. Once you file a bankruptcy petition, it will automatically stop the foreclosure process. Depending on the type of bankruptcy you file, you may be able to work out a payment plan to keep your home. However, understand that once you file for bankruptcy, it can be reflected on your credit report for seven to ten years.
To learn more about foreclosure law in the United States., visit the USLegal Law Digest at: http://lawdigest.uslegal.com/real-estate-laws/foreclosure/7358/.
More June Legal Headlines
Supreme Court Rules in Favor of Gun Rights
The US Supreme Court ruled on June 26th that Americans have the right to keep guns in their homes for self-defense. In doing so, the Court struck down the District of Columbia’s hand-gun ban. The Court said it violated the Second Amendment.
In its ruling, the Court said that the US Constitution does not limit the right of individuals to own guns to participate in state militia service and that it also extends such rights for traditional lawful purposes such as hunting and self-defense.
Writing for the Court, Justice Antonin Scalia stated the District could still regulate handguns, but that a total prohibition was unconstitutional. He said the decision did not do away with “long-standing prohibitions on the possession of firearms by felons or the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings.”
The 5-4 decision came in the case of District of Columbia v. Heller.
See the Supreme Courting at http://www.supremecourtus.gov/opinions/07pdf/07-290.pdf.
Salmonella Outbreak in Tomatoes
The U.S. Food and Drug Administration (FDA) issued a warning in June that an outbreak of salmonella food poisoning had been linked to consumption of raw red plum, red Roma, round red tomatoes, and products containing these raw tomatoes.
According to the Centers for Disease Control and Prevention, the outbreak has occurred in 36 states and has resulted in more than 810 reported cases and 95 hospitalizations since mid April.
The FDA has urged the public to limit consumption of tomatoes to those of the cherry, grape, vine, and homegrown varieties.
Tomatoes also grown from certain states are not affected by the outbreak. For a list of states where harvested tomatoes have been reported safe and to learn more about the FDA tomato advisory, see the following link http://www.fda.gov/oc/opacom/hottopics/tomatoes.html. For more legal news, visit the USLegal Reporter at http://reporter.uslegal.com.
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Law and Legal Definitions
An acceleration clause is a contractual provision which allows the bank or lending institution to declare the remaining balance due and payable immediately upon the occurrence of a default in the obligation.
It is a clause used in an installment note, mortgage, or deed of trust, which gives the lender the right to demand payment in full upon the happening of a certain event, such as failure to pay an installment by a certain date, change of ownership without the lender’s consent, destruction of the property, or other event which makes the loan repayment insecure.
Notice of Default
A notice of default is a notice to a borrower with property as security under a mortgage or deed of trust that he/she is overdue in payments. If the amount owed, plus costs of preparing the legal papers for the default, are not paid within a certain time, foreclosure proceedings may be brought against the property. Other people with funds secured by the same property are usually entitled to receive copies of the notice of default. It is a formal written notice to a borrower that a default has occurred and that legal action may be taken.
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