The Foreclosure Process
Foreclosure is when a mortgage lender, or lien holder, goes to Court to force a sale of real estate to recoup losses stemming from a delinquent home loan. Usually, a homeowner has to be several months behind on mortgage payments before the process begins, and it usually takes many months to complete. It is governed by Wisconsin Statute Chapter 846.
The process begins when a mortgage lender files foreclosure paperwork at the local county courthouse, requesting that the Circuit Court foreclose on the property, force a sale, and allow the mortgage lender to receive funds from the sale. Be careful, in most cases, you only have twenty (20) days to respond to the foreclosure paperwork.
If you do not respond, the mortgage lender will receive default judgment for foreclosure. If you do respond, a judicial process will begin to determine if the mortgage lender has the right to foreclosure. If the mortgage lender wins the judicial process and receives a foreclosure judgment, the homeowner is given a period of time to work something out to save his or her home. This is called a redemption period. In most cases, it is six (6) months, but it can be anywhere between two (2) and twelve (12) months.
Once the redemption period ends, the home can be sold a a sheriff's sale. This is typically done at the County Courthouse by the County Sheriff's Department. A few days after that, the sale is confirmed and the home has a new owner.
Homeowner Options to Stop Foreclosure
Typically, there are three options available to save a home from foreclosure: modification, foreclosure defense, and Chapter 13 Bankruptcy.
Modification. The mortgage lender has the option to modify a home loan, bringing it current. A modification is a rewritten loan, where all delinquent payments are put back into the loan and the interest rate is adjusted, making the homeowner current. If the mortgage lender agrees to a modification, the foreclosure will be closed, and the homeowner will be able to stay in the home.
Although a modification is often best for a homeowner, it can be difficult to get the mortgage lender to agree. Mortgage lenders are notorious for losing applications and paperwork. However, it is always worth the difficulties to contact a mortgage lender and try a modification. It is the least expensive way to save a home in foreclosure.
Foreclosure Defense. Foreclosure defense is when a homeowner directly fights the mortgage lender in Court. For a mortgage lender to foreclose on a home, it has to meet many legal requirements, and in some cases, a homeowner can prevent foreclosure by showing that the mortgage company cannot meet these requirements.
In some cases, this is the best option. Over the last few years, many mortgages have been sold many times over, and documents have been lost. Mortgage lenders are required to produce original loan and mortgage documents. Also, sometimes mortgage lenders take illegal short cuts before foreclosure. Contact an attorney, like Croke & Croke, S.C., who can evaluate your case and help you through this process. Remember, you usually only have twenty (20) days to begin the process once you receive notice of filing a foreclosure case!
Chapter 13 Bankruptcy. Chapter 13 Bankruptcy is a debt consolidation bankruptcy that allows a homeowner to pay their mortgage delinquency through a bankruptcy repayment plan, getting the home owner caught up, while prevent a mortgage company from forcing a foreclosure sale. As a bonus, Chapter 13 Bankruptcy can discharge, or get rid of, many other debts through the same process. At the end of the plan, your house will be caught up, your other debts will be gone, and you will have a fresh start!
Chapter 13 is a great option for many homeowners who are in foreclosure. In my experience, it saves more homes than the other two options. Additionally, there is the possibility of doing a Mortgage Modification Mediation through the Chapter 13 Bankruptcy. This is a way to get a modification without completing a Chapter 13 Bankruptcy. See our earlier blog post, if you are interested. It can be filed at anytime before the sheriff's sale, although it usually takes a few days to prepare the paperwork before filing a Chapter 13 Bankruptcy. As with all your options, contact us to discuss what would be best for you.
CONTACT US TODAY IF YOU ARE FACING FORECLOSURE. LET US SAVE YOUR HOUSE!
If you have been foreclosed on and do not want to keep your home, or you have decided that your home is just too much and want to get rid of it, Croke & Croke, S.C. has options for you as well. We can help you avoid a deficiency balance through Chapter 7 Bankruptcy!