Tuesday, May 5, 2009

The Foreclosure Process Doesn’t Always Result in the Sale of a Home

by Toby Smith, Counselor

Recently, a very distressed homeowner called The Homeownership Resource Center, a division of Family Services, Inc., absolutely certain that the family home was going to be auctioned off at a foreclosure sale the next day. After calming the caller, we collected the necessary information about the mortgage, budget, and correspondence received from the mortgage lender. What we learned after talking to the mortgage company is this:

1) The caller was 8 months behind and the account had been sent to an outside attorney specializing in foreclosures. That attorney started the legal part of the process by sending the homeowner a lis pendens order – the formal and public notice of default.

2) The caller insisted that she did not receive any documents and did not know that she had 30 days from the date of being served the lis pendens order to respond.

3) Meanwhile, a request to modify the homeowner’s loan was coming up for review, but because it was taking so long, a “projected” sale date was set. When the homeowner called the mortgage company to ask about an update on her request, she was told that an actual sale date, not a projected one – had been put in place.

4) Once those points were clarified and the caller realized that her home was not in danger of being sold the next day, all stress levels (including mine) returned to normal. Additionally, the mortgage company advised that the modification request had been assigned to a negotiator, which is usually a positive step toward a permanent change in the loan terms.

We will check back with the homeowner and the mortgage company every week until a resolution is reached.

In South Carolina, foreclosure is a legal process that must go through the courts. In addition to the homeowner, the public is notified via ads placed in the local newspapers. After being served a lis pendens order, a homeowner has 30 days to respond, but more important to note is that even during this period, a resolution can still be worked out. In fact, a homeowner has until the scheduled hour of the sale to save the home. I have been involved in several foreclosures that have come down to the wire and when the home is saved, it is very gratifying; on the other hand, when the home is lost, is hurts very deeply to know that someone is going to be displaced. One more thing – down to the wire transactions almost always require a payment in certified funds. Several months ago, I had a client lose his home at the last minute because he showed up at the designated location with a personal check…

The foreclosure process varies from state to state. Click this link to get more information www.realtytrac.com. Regardless of where you live, seek the services of a HUD-certified counseling agency, never, ever pay for services, and remember – being in the foreclosure process does not always mean that a home is going to be sold. Don’t give up!

For help in North and South Carolina, call 888-320-0350; nationwide, 888-995-Hope.

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