Though foreclosures are no longer at an all-time high as in previous years, millions of the country’s homeowners are still facing the financial, emotional, and personal difficulties associated with foreclosure. Misinformation and misconceptions may significantly affect a homeowner’s ability to make a fresh start, and that is why E. Orum Young has assembled this list of foreclosure myths and the realities behind them.
Bankruptcy Filing Puts the Brakes on Foreclosure
While a bankruptcy filing might temporarily stall the process and give the homeowners enough time and money to build a defense, it should not be used to stop foreclosure altogether. Other mitigation strategies, such as loan modifications, are available to those who work diligently with their mortgage servicers. Depending on the case’s circumstances, an automatic stay may allow the homeowner to make up missed payments or create a payment plan.
Borrowers Don’t Have to Pay the Lender’s Legal Fees
In the fine print of most mortgage agreements, there is language stipulating that the borrower must pay the lender’s legal fees during a foreclosure action. Foreclosure is an expensive and time-consuming process, which means most banks only use it when they’re out of options. While you can challenge certain late and other fees during foreclosure, it’s likely that you will still have to pay the lender’s legal fees if it is in the fine print of the mortgage agreement. An attorney can help you assess your mortgage agreement and figure out what you must pay.
It’s Over After the Property is Repossessed
Following a foreclosure, if the home gets sold for less than the loan amount, the borrower must pay the deficiency or difference. Furthermore, the lender is legally allowed to collect interest on the amount. A deed instead of a Chapter 7 filing may eliminate the deficiency; contact a local bankruptcy attorney for more details.
Even if Stopping a Foreclosure is Affordable, It’s Impossible
Most states, including Louisiana, have laws requiring that bankers stop foreclosure proceedings if the borrower can afford to pay all legal fees, late fees, and skipped mortgage payments. The servicer or lender must give a default and acceleration notice, which provides the homeowner a minimum of 20 calendar days to remedy the default before initiating foreclosure proceedings.
Residents behind on their mortgages or facing foreclosure have legal options available to them. When they choose to work with E. Orum Young, the team might be able to stop the foreclosure, protect the client’s credit, and shield them from certain tax obligations.
Orum Young has filed over 200,000 bankruptcies in Northeast Louisiana and is eager to help you today. We are knowledgeable about bankruptcy law and foreclosure and can offer you advice on how to move forward. Contact our office today at (318) 450-3192 for a free case evaluation.