If you want to save your home from a Sheriff sale, there are number of strategies you can employ – it’s not too late.
Don’t be concerned that its the last minute. You may have been trying for months or longer to get a loan modification or maybe you gave up months ago but now you’re faced with the prospect of having your home sold out from under you by the Sheriff. Here’s what you need to know to survive.
How To Stop The Sale.
There are two methods of stopping the sale before it happens:
1. Adjournments – the lender (plaintiff) or homeowner (defendant) may ask the court to stop or adjourn the sale temporarily for any or no reason. But, the homeowner can only ask twice and each time the sale can only be adjourned for two weeks. The plaintiff or lender can ask as many times as he or she wants. In certain limited situations, the homeowner can ask the court for a further adjournment but it will only be granted for good cause such as there is a sale pending or you are about to be approved for a loan modification.
2. Bankruptcy – this is a powerful tool to (a) stop the Sheriff sale and (b) to bring your mortgage loan current which ultimately saves your home form foreclosure.
Once The Sale is Stopped, How To get Caught Up On Your Missed Payments.
Once the sale has been stopped, it’s time to get working on a loan modification. A loan modification is what most people want and in most cases is the best way to resolve a foreclosure. If its not possible to get a loan modification in the short time you have after you have stopped a Sheriff sale, and we didn’t use bankruptcy to stop a Sheriff sale, then bankruptcy can help to (1) stop the sale after the adjournment runs out, (2) get more time to get a loan modification, (3) use the bankruptcy court’s loss mitigation program to get a loan modification, or (4) get current on the loan without a loan modification.
Can You Get A Loan Modification?
Even though you may have tried and failed or given up hope months ago, and even though the Sheriff sale is about to happen, it still may be possible to get a loan modification to permanently cure your foreclosure case.
The Basic Issue To Be Resolved.
The Arrears – The problem you are facing is that there a number of missed payments and the lender won’t just let you start paying again. Once three payments have been missed, the loan is declared in default and the only way to be able to start paying again is to catch-up on the missed payments. These missed payments are part of what is called the arrears. Any real estate taxes or insurance that may have been paid by the lender and any legal fees and late fees are added together with the missed payments to make up all of the arrears. The arrears have to be paid before the lender will allow you to start making regular monthly payments again.
How to Pay The Arrears – There are essentially three ways to pay the arrears: (1) pay the total arrears in a lump sum, (2) with a loan modification, have the arrears added to the principal balance of the loan, or (3) pay the arrears in 60 equal monthly payments in a chapter 13 bankruptcy plan.
The Tools We Use.
Loan modification – in a loan modification, the arrears are added to the principal balance of the loan and a new amortization schedule is calculated usually based on 30 years and often with a new interest rate. For loans with high interest rates, this helps lower the monthly payment as does extending the term to 30 years and sometime longer. This is the ideal result.
Chapter 13 Bankruptcy – this is essentially a repayment plan that is used to pay the arrears over 60 equal monthly payments. Then, in addition to making these 60 monthly payments, at the same time, you start paying your current monthly mortgage payment. This double payment – so to speak – is what can be tough for many people, that’s why the loan modification is the best route if possible. An additional benefit to the chapter 13 bankruptcy is that in certain circumstances, we may be able to eliminate a second mortgage loan. Also, if you have excessive consumer debt from credit cards, or if you have other debt from medical or other unplanned expenses, these debts can be handled with a chapter 13 bankruptcy.
Consider All of Your Options – Take Action.
As you can see there are a number of ins-and-outs to resolving a foreclosure. This article only scratches the surface but I hope you can see there is help waiting for you if you take action. Don’t be discouraged if there is a Sheriff sale pending. We can stop a Sheriff sale and resolve your foreclosure even though its the last minute.
Get my free Consumer Guide to Saving Your Home From A Sheriff Sale.