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So what exactly is foreclosure? Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real estate due to the owner's failure to make promised payments. When you bought your house, you signed a contract guaranteed by the title to the house. That contract gives the mortgage holder the right to take the house back from you for failure to make scheduled payments.

Foreclosure is a Legal Process

First, it’s important to know that foreclosure is a legal process. It’s a legal action brought in court by attorneys hired by the mortgage holder. Bill collectors who call you may threaten to foreclose on your house. But that’s an empty threat meant to intimidate you. Only a lien holder can legally foreclose on your house.

A good attorney can Stop the Foreclosure

If your lender decides to foreclose, you will be served with a legal notice called an “Intent to Foreclose.” Once the process has begun, you would be wise to hire an attorney who really knows the laws pertaining to debt relief and foreclosure.

Don’t fall for "foreclosure rescue” Scams

There are hundreds of “foreclosure rescue specialist,” “credit doctors” and “credit counselors” out there ready to take your money and promising to save your house. There are even companies that promise to pay off your mortgage for you. Many of these people are predators. They will waste crucial time and probably do nothing to help. Again, your best move is to hire a qualified attorney to stop the foreclosure.

The Foreclosure Process Step by Step:

You miss a mortgage payment.
The bank sends you a late payment notice.
You miss another payment.
The bank contacts you to try and resolve the situation.
You fail to reach an agreement with the bank.
The bank invokes your loan’s acceleration clause.

What does this mean? By the terms of your mortgage agreement, if you fail to make the scheduled payments, the
bank has the right to accelerate or “call” your loan. Once they do, you are legally obligated to pay off the entire loan
balance. Plus interest. Plus penalties. Plus the bank’s legal fees. And it’s all due immediately.

Once the bank calls your loan, you’ve reached the point of no return and you need to contact an attorney who
specializes in foreclosure law to protect your rights. But if you continue to do nothing, here’s what will happen:

Bank sends by sheriff or by certified mail Notice of Intent to Foreclose.
Bank begins action in the court system to foreclose.
Legal notices as required by law are published in local newspapers.
Notice and waiting periods expire.
Court holds hearing regarding the bank’s claim.
Court issues order allowing bank to foreclose.
Legal notice of actual foreclosure sale and advertisements published in local newspapers.
Your house is sold to the highest bidder.

How long does all this take? From the time you miss your first payment to the final foreclosure sale its not uncom-
mon for nine to twelve months to pass. It also depends on your mortgage holder and how aggressively they pursue
your case.

Time to call an Attorney

OK, so your bank has called your loan, or more time has gone by and you’ve been served with actual foreclosure papers. Now what? As we’ve said, once they call your loan, it’s time to call a qualified attorney. If you’ve been served with a foreclosure notice, your need for an attorney has become even more urgent.

Surprisingly, many people, even at this late stage in the foreclosure process, continue to do nothing and eventually
lose their homes. Please don’t let this happen to you. You can still turn things around if you get qualified legal help.

When people faced with foreclosure come to DebtStoppers, they know they’ve gotten behind in their mortgage
payments and they’re about to lose the family home. That’s obvious, and it’s usually their entire focus. We
understand that. But it’s my job to widen that focus and help the client see the whole picture. After all, if you’ve
missed enough mortgage payments to be in foreclosure, are you likely to be up to date with your credit cards, utility
payments, medical bills and taxes? Probably not.

Most DebtStoppers clients need to re-organize their debt. They also need a plan that gives them an affordable way to get back on track. Our foreclosure clients need that help, too, but they have another problem as well – they’re running out of time. It’s our job to get them the time they need. So in many cases, we use a legal remedy that not only stops the foreclosure, but provides a workable plan going forward. That tool is debt re-organization under Chapter 13 Bankruptcy.

You can learn more about Chapter 13’s in our bankruptcy section here or on the DebtStoppers Channel on Comcast Video on Demand, but as it applies to foreclose, here’s how it works:

How we save your house and get you the time you need:

First, once we file the petition, the foreclosure stops. The bank no longer has a legal right to foreclose. For your
family’s piece of mind, this is the most important advantage of a 13 – you keep your house. But in terms of your
financial future, there are features of a Chapter 13 reorganization that are even more valuable.