People face foreclosures for a number of reasons, and none of them are pleasant. Things are not going as planned and the roof over your head may belong to your lender soon. If this is happening to you, then you should act as urgently as if the house was on fire. Don’t wait until it’s too late to learn your options. There are options. Standing like a deer in headlights is not one of the options. Yes, it takes about 4 months from the Notice of Default to the sale date, but you need that time to explore and act.
Chapter 13 is the typical option, and I’ve saved many dozens of homes before the auctioneer’s gavel came down at the foreclosure sale. I’ve gotten very creative in using this chapter of the bankruptcy code over my 25+ years of practice. There’s real power there to keep your house from going back to the bank.
As of late, loan modifications are often used instead of, or in connection with Chapter 13 cases. It’s good practice to have a Chapter 13 in the wings to activate should loan modification efforts fail, but many of my clients have received modifications before having to file Chapter 13, or even afterward.
What most people don’t know is that under FHA guidelines, you can refinance a mortgage after only one year of making consistent, timely payments under a Chapter 13 plan. The Chapter 13 case can then be dismissed if you’ve wrapped everything up with the refinance.
Don’t lose your house because you became depressed about the foreclosure and the events that led up to it. You worked too hard to get your home, and it’s worth the struggle to keep it. Having us in your corner during that fight is one of the smartest things you can do.