State Laws
>Foreclosure Process
Foreclosure occurs when you fall behind in your mortgage obligations and your lender proceeds to take legal action to reclaim your property and sell it at a public auction. There are two basic types of foreclosures. Most states, including California, follow the non-judicial foreclosure process. Other states follow the older more traditional process of judicial foreclosure. Additionally, you will find that every state has slightly different rules and procedures so it is strongly advised to check the specific foreclosure rules of your state.

How to approach you lender

Be honest. Contact your lender and ask to speak to their foreclosure representative. Many lenders will have an entire department devoted to working out financial arrangements with borrowers who are facing default of their home loans. So ask for what you need, be realistic and be respectful. Ask them to consider temporarily suspending your mortgage payments for a fixed period of time. Usually this will only be a few months. It is advisable to ask if they would consider a reduced payment for short time while you get your financial situation back in order. If they believe you are sincere and that you actually have the ability to get current and again make your full payments you may find they are willing to work out a reasonable repayment plan. Again, lenders make their money through collecting loan payment not by being entangled in legal battle like foreclosure. This is especially true if the property is in a different state from the lender and they are not familiar with your local real estate market.

Request Your Loan and Balance Information from Lender

You have a legal right to request detailed information about your account from your lender. This will help you confirm the accuracy of your lenders claim and send a strong signal to the lender that you are taking this matter seriously. Your lender must by law respond to your request and provide you with a full accounting of your loan and the balances due.

Document your communication

It is highly advisable to keep a written diary of your conversations with your lender as you negotiate your settlement– so don’t be shy about using e-mail and certified mail to document your communication with them. Should a settlement be agreed upon, you will obviously need a written agreement. You may also consider contacting an attorney to go over the settlement with you. If you cannot afford an attorney, consider contacting a HUD-approved housing counseling agency. These agencies can help you understand the implications of a repayment plan and what your legal obligations are following the settlement.

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