What to Do About Missed Mortgage Payments and Home Foreclosure

Gaining clarity from a Foreclosure Lawyer

Missing mortgage payments on your home loan is stressful. Part of the stress is not knowing what your options are or how much time you have left before your home is sold. This blog will provide some needed clarity, as will a foreclosure lawyer in Belgrade, MT, like from Silverman Law Firm.

First, relax because you have some time before the bank begins and completes the foreclosure process. Foreclosure is the process that all banks must go through before your home is sold. The length of this process will depend on whether the bank is foreclosing either Judicially (through the court) or Non-Judicially via a Deed of Trust. No matter which process is used, it usually takes at least 4 to 5 months (and sometimes up to or over a year) before your home can be lawfully sold. During this time, you may lawfully remain in your home.

But let’s back up and consider some of the alternatives to foreclosure. I.e., let’s consider some ways you can stop and foreclosure from even happening. First, if you’re only a few months behind on your mortgage payment, there is plenty of opportunity to get in touch with the bank and do a loan workout. Loan workouts options include a forebearance agreement and/or repayment agreement. The key here is contact your bank/loan servicer right away when you miss a payment (or are about to miss a payment). 

Forbearance agreements are when a bank allows you to make reduced or no payments for a while, during which time the bank will not seek to foreclose on your property. The bank, however, will want to know that you will be able to make payments in the near future. forbearance agreements are usually coupled with a repayment agreement. Repayment agreements allow you to repay your missed payments over an extended period of time (along with making your regular payments). Therefore, with a forbearance and repayment agreement, the bank agrees not to foreclosure on your home with the understanding that in the future you will incrementally pay back the missed payments, along with making regular payments.

If you are not eligible for a forbearance/repayment agreement, then you should ask your lender about a loan modification. A loan modification is a process where the terms of a mortgage are modified outside the original terms of the contract. For instance, you may be able to obtain a lower interest rate, extended repayment term, or even a principal reduction. There are both for-profit and non-profit debt counselors that can help you through the process of applying for a loan modification. Loan modifications are typically an option for borrowers who are unable to refinance.

If you are unable to obtain a loan workout or loan modification, then it is likely that you will have to give up your home at the end of the foreclosure process. At this point, you may seek to delay the foreclosure process by filing for bankruptcy. If you are facing foreclosure, be sure to contact an attorney so you understand your rights and options.