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When do property owners have to worry about foreclosure?

On Behalf of | Apr 10, 2024 | Real Estate Law

Someone’s primary residence is one of their most valuable assets. They may have made a down payment worth thousands of dollars to purchase the property followed by months of regular payments toward the principal and interest accruing on their mortgage.

Homeowners often also reinvest in their property by improving it slowly while they live there. From updating the electrical systems to improving the landscaping, those investments could represent tens of thousands of dollars in income and could substantially improve the fair market value of the home. Unfortunately, all of those investments could be at risk if someone faces foreclosure.

When does a homeowner have to worry about a lender foreclosing and gaining ownership of the home where they live?

Owners must miss multiple payments

There are numerous regulations limiting foreclosure attempts for the protection of homeowners. For example, lenders typically cannot foreclose just a few days after a single missed payment. Most foreclosure proceedings require that a homeowner miss at least four consecutive payments before the home is at risk. At that point, A lender must send them written notice. Proper communication between mortgage lenders and property owners is a key component of the foreclosure process. Lenders need to advise people of the risk of foreclosure and provide them with an opportunity to catch up on their mortgages.

People can fight back against foreclosure

Foreclosure does not occur instantaneously. As previously mentioned, it requires mandatory written communication between the lender and the property owner. The lender must also initiate legal action to foreclose on the property and assume ownership over it.

Homeowners facing foreclosure may have several viable options for defending themselves during that process. For example, they may be able to establish in court that the lender violated procedural requirements. Other times, they may have proof that they have made at least one of the payments that the lender claims to have not received. In some cases, owners can potentially negotiate with the lender before the foreclosure goes to court to modify their loan and protect themselves from foreclosure.

Exploring every option can be beneficial for those facing residential foreclosure proceedings, or the risk of them. Know that the team at Goodkin APC can help homeowners explore their options for defending against a potential foreclosure if you are in need of assistance.