Foreclosure laws have been modified in the past 8 years to become tougher on homeowners that walk away from mortgage payments or refuse to pay. A big misunderstanding about foreclosure is that the debt is not totally forgiven when a bank or mortgage lender sells or takes back a property. The debt that is not paid includes the loss on the home during a sale, back mortgage payments and any additional fees that compound the original debt.
State and federal laws have been rewritten to give banks and mortgage lenders the ability to sue homeowners for past due debts. First popularized by credit card companies, the deficiency judgment is a legal court order that is handed down by a judge. This order demands payment in full for past debts. Creditors are now taking advantage of these judgments to pursue homeowners that have already been through the completed foreclosure process. A foreclosure is not the final step of the resolution process. All judgments will be pursued and can remain on a credit report for up to 25 years.
There are ways how to avoid a foreclosure deficiency judgment. The first way is to begin communication with your bank or lender when you first receive notification that the foreclosure process has started. You are likely to be the last to know when foreclosure begins. It is common for foreclosure legal experts to have already started working to take back your property. Avoiding communication with lenders or mortgage representatives will put you on the fast track to a deficiency judgment after a date of sale is scheduled for your property.
Another option is to write a financial hardship letter to your bank or lender and ask for reinstitution of your monthly payments. Foreclosure often suspends the acceptance of payments and accelerates that sale process. Lenders may approve your request to keep your home and avoid a notice of sale being issued. You could be able to make arrangements to pay your overdue mortgage over an agreed upon number of days. This can help you avoid the deficiency judgment from damaging your reputation and credit score.
Expert counseling can help you stop foreclosure from leading to a judgment. Lenders can often negotiate with an experienced counselor that will work hard to avoid foreclosure. The process of foreclosure can be stopped by not making mistakes along the way and doing exactly what a mortgage company or lender says to do. Alternative options like a short sale can also help you avoid deficiency judgments. Getting expert help is the first step to avoiding the disasters of foreclosure.
Call Avoid Foreclosure at 1-800-589-4106 and let expert counselors help you avoid foreclosure deficiency judgments.