What Are Your Rights at a Mortgage Foreclosure?

Even if your mortgage lender has foreclosed in your house, this doesn't mean you no longer have any rights. Foreclosure is a legal procedure: While the creditor has the right to market should you've fallen behind on payments, you still have legal protections which will allow you to recover your premises, or stay in it longer than you might think.

Court Proceedings

If the creditor decides to foreclose, it’s going to have to inform you, in writing, which it plans to file court to take your house. This gives you the time to attempt renegotiating with your creditor before the final purchase, or to make up the missed payments, with any penalties demanded. You have the right to fight the foreclosure in court. The procedures vary from state to state.

Non-Judicial Foreclosure

In some countries, such as California, lenders use a deed of trust to secure your house loan rather than a mortgage. In the event you default, Foreclosure.com states, deeds of trust can usually be sold without going through a court hearing, but under California law, you still receive 20 days notice of the sale. If you settle your mortgage loans in 15 days of notification, you can stop the foreclosure. California law protects you if a non-judicial foreclosure sale does not wipe out your debtUnlike judicial foreclosures, the creditor can’t take legal action to get you make the gap.

Right of Redemption

California is among the several countries that give you a”right of redemption,” Foreclosure.com states: Following the creditor sells your house, you have one year to purchase it back, assuming you meet various legal problems. The precise conditions and time limits vary from state to state.

Eviction

Foreclosure will not evict you in your house, the DebtWorkout.com states. Even after the house has been sold, you have the right to remain inside before the owner goes through the legal actions to get you evicted.

HAMP

If your loan was endorsed by Freddie Mac or Fannie Mae–government-sponsored enterprises created to shore up the mortgage market–then you have the right to use to your Home Affordable Modification Program under the national Making Home Affordable principles. Underneath HAMP, lenders receive financial incentives to work out a method of lower monthly mortgage payments. You will have to meet HAMP qualifications, including being unable to afford your existing payments, and having a combined mortgage, taxes and insurance adding up to more than 31% of your earnings.

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