Foreclosure FAQ

1. What is foreclosure?

Foreclosure is the legal process a lender uses to take ownership of a property when the homeowner fails to make mortgage payments. The home is then sold to recover the unpaid loan balance.

2. What causes foreclosure?

Common reasons include:

• Missed mortgage payments
• Job loss or reduced income
• Medical bills or unexpected expenses
• Divorce or major life changes
• Adjustable-rate mortgage increases

3. How long does the foreclosure process take?

The timeline varies by state, but it typically takes 3 to 6 months after the first missed payment before foreclosure is finalized. Some states require judicial proceedings, which can take longer.

4. Can I stop foreclosure once it starts?

Yes, options include:

• Loan modification – Adjusting your loan terms
• Repayment plan – Catching up on missed payments
• Forbearance – Temporary payment relief
• Selling your home – Before the foreclosure sale
• Filing bankruptcy – As a last resort

5. Will foreclosure affect my credit score?

Yes. A foreclosure can lower your credit score by 100 to 160 points and remain on your credit report for 7 years.

6. Can I sell my home during foreclosure?

Yes, you can sell your home before the foreclosure sale date. If your home’s value is less than what you owe, you may need a short sale, which requires lender approval.

7. What is a short sale?

A short sale is when your lender agrees to let you sell your home for less than the remaining mortgage balance to avoid foreclosure.

8. What happens after foreclosure?

The lender takes ownership and sells the property. You may still owe a deficiency balance if the sale price doesn’t cover the full loan amount, depending on state laws.

9. How can I avoid foreclosure?

• Communicate with your lender early
• Explore loan modification or refinancing
• Seek housing counseling from HUD-approved agencies
• Consider selling before foreclosure starts.  Contact me TODAY, if you are facing possible foreclosure.