More often than not, people secure a mortgage to be able to acquire property simply because this is one of the most viable ways to do so rather than spending a hefty sum for upfront payment. However, there are instances wherein because of unforeseen situations, you may fall behind your mortgage payments. In this case, the lender can try to take back your property. The process of doing so is referred to as foreclosure. This article delves into your rights during a foreclosure process.
Loss Mitigation Rights
During a foreclosure process, keep in mind that you have loss mitigation rights, which means that the loan service provider is required to get in touch with you no later than 36 days after you have missed your first payment. It also follows that they should try to reach you within 36 days of any subsequent missed payments. According to a seasoned Fort Lauderdale foreclosure defense lawyer, you and your lender should initially work together to try and avoid foreclosure because this is your loss mitigation rights. Your loan service provider should also be able to provide you with loss mitigation options or even refer you to a third party who will be able to help you avoid foreclosure.
Right to Breach Letter
Apart from loss mitigation rights, you also have the right to receive a breach letter which includes details about the default and its causes, as well as what you need to do to inhibit the default and reinstate your loan. It should also include the date when you should act upon the default, which is often 30 days or a month after the receipt of the breach letter. Additionally, the letter should also include a certain notice indicating that if you fail to inhibit the default and reinstate your loan, the sale of your property is imminent.
Usually, to inhibit foreclosure, you need to pay the past due amount in full on or before the due date stated in the letter. However, this means that you also need to settle all the interests and late fees that come with it. In case you fail to make the necessary payments or find means on how you will be able to address the default, then it is most likely that the foreclosure process will begin.
Right to Notice of Foreclosure
You also have the right to receive a notice of foreclosure, which can either be judicial or nonjudicial. In terms of the former, you may be summoned to let you know that the foreclosure process has already begun. In terms of the latter, you can receive either a notice of default (NOD) or a notice of sale (NOS). A NOD is a public notice that states that you are in default while a NOS will most likely be mailed to you or posted on your property. In case you don’t receive any of these, then you have a great chance to refute the foreclosure process.
Right to Reinstate
In case you make a lump sum payment, you may be able to stop the foreclosure process. However, this still depends on the real estate legislation of the state that you are in. Nevertheless, when you make a lump sum payment, you also need to settle the interests, fees, and penalties that come with it. From there, you should be able to resume your mortgage payments. Just keep in mind that there is often a particular deadline on when you are allowed to reinstate the loan.
Right of Redemption
As soon as you have settled the payments that you need to reinstate your loan, you have the right of redemption or take back your property before a foreclosure sale even begins. Some states even allow redemption even if the property is already sold. In this case, you need to buy it back, depending on the situation. In general, you will be able to redeem your property after you pay the full balance, or reimburse the money that the buyer has spent during the foreclosure sale.
There are unfortunate circumstances wherein you may fall behind your mortgage payments, enough for the lender to try and take away your property through a foreclosure. Just keep in mind that through the entire process, you still have numerous rights such as those listed above. Apart from those though, you also have the right to foreclosure mediation, as well as the right to challenge the foreclosure process. If you are aware of your rights, then you will be in a better position to assert them even during a foreclosure process.