A Homeowner's Rights During Foreclosure
Foreclosure can be an emotionally and financially difficult time in the life of a homeowner and it can affect not only the homeowner but also the homeowner’s spouse and children who live in the home being foreclosed. Therefore, it is important to be aware of your rights as a homeowner during every stage of the foreclosure procedure.
State laws vary about the time frame and procedures required for a foreclosure. However, most foreclosures follow a common trend. After a homeowner fails to make his or her monthly mortgage payments for a period of time (typically 90 days or more) the lender may decide to start foreclosure proceedings in order to take complete ownership of the property which serves as collateral on the mortgage.
If the lender decides to pursue a foreclosure then the lender must provide the homeowner with written notice of that intention. The homeowner has the right to pay back all past due amounts along with the late fees and other penalties agreed to in the mortgage contract. If the homeowner does pay all outstanding fees and past due amounts then the foreclosure process will be stopped.
In reality, it is not always possible for the homeowner to come up with all of the money that is owed to the lender at the time of the foreclosure notice. The homeowner has the right to discuss payment options with the lender and to try to work out an agreement whereby the terms of the loan are renegotiated so that the homeowner keeps the property.
The homeowner may also discuss the possibility of a private sale with the lender. Sometimes a private sale can yield a higher selling price than a foreclosure and it can pay off the existing mortgage debts while leaving the homeowner with a profit. It is important to note that the right to redemption would not attach to a private sale.
The homeowner may remain in the home during the foreclosure process. However, with that right come the responsibilities to adequately maintain the home and pay the real estate taxes and homeowners insurance. Those responsibilities attach whether or not the homeowner decides to remain in the home during foreclosure.
If an agreement cannot be worked out prior to foreclosure, then the homeowner has the right of redemption in some states. This statutory right allows the homeowner to regain ownership of the house by buying it back after the property has been foreclosed. Approximately half of the states have this right. The redemption laws allow the homeowner to regain ownership of the home paying the foreclosure sale price and a statutory interest rate to the lender. Usually, this right must be exercised within 6-12 months of the foreclosure sale.
Throughout the foreclosure process the homeowner has the right to be treated fairly. Any money that is earned on the sale in excess of the amount owed on the mortgage, late fees, penalties and foreclosure costs should go to the homeowner.
Sometimes, foreclosure is inevitable. However, the unpleasantness of the experience can be minimized if the homeowner is aware of his or her rights.
Additional Foreclosure Articles
- How do creditors get paid when foreclosing on a house to satisfy unpaid debts?
- What is the Homeowner Affordability and Stability Plan?
- Why Would a Lender Agree to a Short Sale?
- How To Avoid Foreclosure
- Can My Lender Come After Me in Court for the Loan Balance I Owe After a Short Sale?
- Will My Lender Accept the Short Sale as Payment in Full for My Loan?
- What is a loan modification, and how will it help me with my mortgage?
- When and why does foreclosure begin?
- Are you at risk of foreclosure?
- What is acceleration?
- How long does it take to get a loan modification?
- I have already filed for bankruptcy. Will the Homeowner Affordability and Stability Plan help me keep my home?
- What is a Short Sale?
- How do I know if my loan servicer is participating in the Homeowner Affordability and Stability Plan?
- What do I need to give to my loan servicer if I am requesting a loan modification?
- I've fallen on bad times and am having trouble paying my mortgage. What should I do?
- The Mortgage Forgiveness Debt Relief Act of 2007
- What are the basic eligibility requirements for a loan modification under the Homeowner Affordability and Stability Plan?
- Are all mortgage loans eligible for refinancing or loan modification under the Homeowner Affordability and Stability Plan?
- Will I be ineligible for a loan modification under the Homeowner Affordability and Stability Plan if I am current in my mortgage payments?
- Can I refinance or modify the loan on my rental home or duplex?
- What happens when you miss your first mortgage payment?
- Do I have to undergo debt counseling to participate in either the loan modification or refinancing programs under the Homeowner Affordability and Stability Plan?
- Will I be eligible for a loan modification under the Homeowner Affordability and Stability Plan if I am behind in my mortgage payments, but my house is not yet in foreclosure?
- Will the Homeowner Affordability and Stability Plan save my home from foreclosure?
- Should I have an attorney help me with a loan modification - or do it myself?
- What happens after you miss a second mortgage payment?
- Can I Use a Loan Modification Program in Order to Save my Home from Foreclosure?
- What is required of me to get a loan modification? Will it cost me anything?
- My loan is scheduled for foreclosure. What should I do?
- Renters Lose in Foreclosures
- What happens after a third month of missed mortgage payments?
- Does a loan modification reduce the amount of money that I owe on my mortgage loan?
- If I'm current on my mortgage will the Home Affordable Refinance Program help me?
- What are the eligibility requirements to refinance under the Making Home Affordable Plan?
- If I am not eligible for a loan modification under the Homeowner Affordability and Stability Plan, is there anything else I can do to lower my monthly mortgage payments?
- How do I know if I am eligible for refinancing my mortgage loan under the Homeowner Affordability and Stability Plan?
- What happens after a fourth month of missed mortgage payments?
- How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
- I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?
- What's the difference between loan modification and debt settlement?
- I have two mortgages on my home. Can I modify or refinance both mortgage loans under the Homeowner Affordability and Stability Plan?
- What happens at a Sherrif's or Public Trustee's Sale during foreclosure?
- Will refinancing lower my payments?
- Will refinancing my mortgage under the Home Affordable Refinance Program, or other programs, reduce the amount that I owe on my loan?
- If I refinance my home under the Homeowner Affordability and Stability Plan, can I get the cash equity from my home to pay off other debts?
- Am I eligible to refinance my mortgage loan under the Homeowner Affordability and Stability Plan if I am behind on my mortgage payments?
- What is the Redemption Period?
- How do I apply to refinance my mortgage under the Home Affordable Refinance Program?
- Who is eligible for a loan modification under the Home Affordable Modification Program?
- What is deed-in-lieu of foreclosure?
- What is a 'short sale'?
- Who is eligible for a short sale under the Making Home Affordable Foreclosure Alternatives Program?
- What happens during Assumption of a mortgage?
- What is a pre-foreclosure sale?
- How long do I have to try to sell my house as a 'short sale'?
- What can a creditor do if a debtor won't pay?
- Can any property be sold as a 'short sale'?
- What is a Special Forbearance?
- If a lender agrees to a short sale, will I owe tax on the deficiency?
- What is the Hope for Homeowner's Act?
- What is the Fair Debt Collection Practices Act (FDCPA)?
- What is the Truth In Lending Act?
- What Is a money judgment?
- I'm in foreclosure... can refinancing under FHASecure still help me?
- What is a Lien?
- Who is eligible for the Hope for Homeowner's Act program?
- Who can help me apply for the Hope for Homeowner's Act program?
- How much can I borrow under the Hope for Homeowner's Act?
- If I refinance under the Hope for Homeowner's Act, can I take out a second mortgage later?
- What costs are associated with a new mortgage under the Hope for Homeowner's Act?
- What is the interest rate on a new Hope for Homeowner's Act mortgage?
- Can I still get a Hope for Homeowner's Program mortgage if I'm already in foreclosure?
- How long does it take to apply for a Hope for Homeowner's Act mortgage?
- What is the FHASecure refinancing program?
- Are homeowners with interest only mortgages eligible for an FHASecure refinance?
- Who can help me apply for the Hope for Homeowner's Act program?
- Is there an income restriction to get a Hope for Homeowner's Act mortgage?
- What are the requirements for an FHA Streamlined Mortgage Refinance?
- What kinds of streamline refinances do lenders offer?
- What is Judicial Foreclosure?
- What is a Power of Sale Foreclosure?
- What is Strict Foreclosure?
- Factors to Consider Before Deciding to Foreclose
- What are Credit Counseling Agencies?
- Foreclosure Protection for Victims of Hurricane Sandy
- Wage Garnishment Orders Cannot Garnish It All
- What are my obligations if I co-sign a loan for another person?
- What is the Fair Credit Billing Act?
- The Federal Reserve Board's New Credit Card Protections for the Consumer
- Secured Transactions: Which Party is Secure?
- What are Negotiable Instruments?
- Different Types of Foreclosure
- How Can a Creditor Repossess Property?
- The Foreclosure Timeline
- Defenses to Repossession
- Understanding the Foreclosure Process
- A Plain Language Explanation of Your Options for Avoiding Foreclosure
- Alternatives to Foreclosure
- What to do About Your Mortgage When You're Facing Money Problems
- When Can Property be Repossessed?
- Bankruptcy or Foreclosure?
- Ten Tips for Avoiding Foreclosure
- Foreclosure Laws in Hawaii
Search LawInfo's Foreclosure Resources
State Foreclosure Articles
- District of Columbia
- New Hampshire
- New Jersey
- New Mexico
- New York
- North Carolina