What is Foreclosure?
It’s when a homeowner is unable to make principal and/or interest payments on their Bay Area mortgage. The lender, a bank, can seize and sell the property as stipulated in the terms of the mortgage contract.
What Happens When a Mortgage Payment is Missed?
Unfortunately, Foreclosure can happen. By missing 3 mortgage payments, your lender has the legal means to repossess your home and force you to move out. If your property is worth less than the total amount you owe on your loan, a Deficiency Judgment could be pursued. Both a Foreclosure and a Deficiency Judgment can affect your ability to qualify for credit in the future. So you should avoid foreclosure, if possible.
How Can a Foreclosure be Avoided?
First of all, if you are struggling to make your payments, call or write to your lender’s Loss Mitigation Department right away. Explain your situation and be prepared to provide them with financial information like your monthly income and expenses. Just follow these 3 simple rules:
- Contact your lender as soon as you know your payment will be late.
- Never ignore the lender’s letters or phone calls.
- Don’t assume that your situation is hopeless.