FAQs About Mortgage Foreclosures

As the economic crisis deepens, more people are facing foreclosure. Before that day comes, know your rights and responsibilities, and what you may expect should you face foreclosure.

Q: What happens if I cannot make my mortgage payments?

A: Let your lender know as soon as you can, preferably in writing. Although your lender can insist that you make your mortgage payments in full and on time, lenders also know about the economy, and many are willing to work with you. Ultimately, most lenders would rather have your money than your house.

Q: What options do I have if the lender threatens foreclosure?

A: Surprisingly, you may have a number of options. The first is to negotiate with your lender. It is the lender's loan, and the lender can agree to almost any kind of solution that you can imagine, although most will not be willing to suspend payments for a long period of time.

Another option is to refinance with a new lender at a lower rate or for a longer term. Selling your home quickly may be an option, as long as you will get enough to pay your mortgage (or you can make up the difference out of your pocket). Bankruptcy is always an option, as the bankruptcy court may give you time to catch up on your mortgage. Finally, the federal government currently is announcing new programs to help homeowners.

Q: What happens if my lender sues for foreclosure?

A: Just because you have been sued does not mean that the options discussed above are off the table, but you will have to work fast. If you are served with a foreclosure suit, hire a lawyer as soon as you can. Even if you have not retained an attorney, file an appearance and answer so that you will receive notice of what is happening.

Homeowners have 90 days to bring their loan current to avoid foreclosure; do this if you can. Even after foreclosure, you have the right to "redeem" your home by paying off the loan in full within 90 days. If none of this is done, you will have to leave the home after it is sold at auction, but this process can take seven months or more from start to finish.

Q: I received some mail promising help in working out my foreclosure; should I send money?

A: Unfortunately, as foreclosures rise, so do foreclosure scams. Legitimate nonprofits and legal aid organizations can help, but avoid people demanding money up front to "renegotiate" your loan.

Also, avoid those who offer to buy your house and lease it back to you, giving you the right to repurchase it later. You will discover that the price you have to pay is far more than you will ever be able to pay, and you will probably end up being evicted.

This website is not intended to constitute legal advice or the provision of legal services. By posting and/or maintaining the website and its contents, Lucas Law does not intend to solicit business from clients located in states or jurisdictions outside of Illinois wherein Lucas Law or its individual attorney(s) are not licensed or authorized to practice law.