Divorce Foreclosure Options - Alternatives To Stop Foreclosure Before It Starts
Divorce Foreclosure Options - Alternatives To Stop Foreclosure Before It Starts
Divorce foreclosure is a legal option in which homeowners, upon selling their property to pay their creditors, are left without the house and are unable to remain in it. Such properties, previously owned by the homeowners through the time of the marriage, become subject to court sale. A notice is posted on the door of the property notifying the homeowner that immediate foreclosure proceedings have been initiated. In some cases, the home is given to the creditor as a final settlement.
Another option is a 'short sale'. In a short sale, the value of the house is less than the balance due on the mortgage. A deed in lieu of foreclosure is used. A lawyer or real estate agent may be involved in this process. However, this is a less preferred option in terms of cost and would only be utilized if there are no other available options.
The remaining option is a foreclosure auction. In this event, the lender sells the house at an auction to cover the remaining debt. At the auction, the proceeds from the auction are distributed to the mortgagor and all other named parties. This option is often the most preferred among borrowers because they can avoid losing their home in a foreclosure auction.
The second step in a divorce foreclosure process is for the lender to initiate legal actions. The first step would be a complaint naming the homeowners as parties. In some instances, the complaint is merely a precursor to a suit. It is important for homeowners to understand that the lender has the right to bring such complaints and requests a court action against the named parties.
The next step is for a complaint to be filed with the courts. This is known as an eviction complaint. In this complaint, the lender states the reasons for foreclosure and asks for an order that the homeowners leave the property. The bank can file such actions as garnishment, attachment of rents, compulsory sale, repossession, levy, etc. Depending on the state laws, the lender may also ask for a temporary restraining order (TRO).
The court then takes up the foreclosure proceedings. If the TRO is granted, the court orders the homeowner to leave the property immediately. If the bank has not acquired the house by the end of the specified time, foreclosure is formally entered and the lender has full right to sell the house. If the homeowners do not leave voluntarily, the foreclosure trustee or the lender has full rights to sell the property and recover his loan amount.
Another option available to the bank is to sell the house through a public auction. However, the bank has to follow certain guidelines and limitations set by the courts. A foreclosure auction has to be organized and conducted within a stipulated period. The lender has the right to withdraw the auction if he does not get the amount he had expected.
It is important to consult an expert lawyer to guide you in your dealings with the lenders and the courts. This way you can learn more about the foreclosure process and various options available to homeowners. You can also prepare an attractive financial hardship letter that can help improve your chances of stopping the foreclosure. A lawyer can guide you better in dealing with lenders and court representatives during the entire foreclosure process.
The second option is to seek assistance from an attorney who specializes in foreclosure law. Such an attorney can provide divorce and foreclosure lawyers to communicate effectively with the bank and other parties involved in the process. The attorney can also help stop the foreclosure if the homeowners are financially sound. However, foreclosure attorneys are expensive. The divorce process may take years and it may also be a challenge for the homeowners to find an attorney who can afford the entire burden.
One of the last resort options for homeowners is selling the home at an early stage. In such cases, the lender may agree to accept the mortgage agreement but will then require advance payments to seal the deal. The lender will then foreclose on the house in the absence of any final payment. This is the easiest way to avoid foreclosure and is generally used by homeowners with good credit scores who are desperate to sell off their homes in time.
The last option is to use the loan modification program offered by the federal government. Homeowners need to meet eligibility criteria and get approval from the lender before they can apply. It is a lengthy process and does not resolve the fundamental issue of the property being in default of the mortgage agreement. Most importantly, the federal government has not eased up on the loan modification program to help borrowers remain in their homes. Even if the borrowers do not qualify for the program, they can apply for financial assistance from the US government through various state department programs and organizations.