Consumer Rights on Foreclosures
If you are facing foreclosure, feelings of helplessness may consume you. However, you should know that you have rights and there are options available to you that can provide protections during this crucial but delicate process.
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Right for Timely Notification of Foreclosure
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If you fall behind on your mortgage payments, your mortgage company has the right to seize the property from you. While it has this right, it cannot summarily evict you from your home. The length of time your lender must give you before foreclosing depends on the laws of the state in which you reside and it varies widely. In general, however, the process entails several steps. The first step a lender takes is serving you with a notice of default. When this happens, you will have a certain number of days, typically 30, to pay off the amount in default to halt foreclosure proceedings. During this time, you also have the right to sell the property and use the proceeds to pay off the mortgage. After the lender has served you with the notice of default and you fail to respond within the number of days required by your state's law, the next step for the lender in a judicial foreclosure state is to file suit against you. In a nonjudicial foreclosure state, the lender doesn't have to go to court to commence foreclosure.
Right To Appeal In Court
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If you are in a judicial foreclosure state, you reside, you can have your day in court to appeal or voice concerns about the foreclosure. In judicial proceedings, the lender is required to file papers through the local court system in order to foreclose on your property. The lender must serve you with these papers, and you then typically have 30 days to respond.
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Requests You Can Make of Your Lender
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You have the right to request that the lender provide you with the original note for your mortgage. This is extremely important if your loan has been resold several times and you have had many different mortgage companies. You can also request your lender's permission to sell your house at fair market value, but below the mortgage balance, through a short sale.
Filing Chapter 13 Bankruptcy Protection
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As a consumer, you have the right to file for chapter 13 bankruptcy to halt the foreclosure. Furthermore, the filing can even cure delinquent mortgage payments over time, according to the Administrative Office of the U.S. Courts.The office notes that you still are obligated to make your future mortgage payments on time. Also, you should not file for bankruptcy lightly considering the substantial negative impact this will have on your credit.
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