Sunday, March 31, 2013

Stopping foreclosure of your home.

In New Hampshire, most home mortgages have a "power of sale" clause.  A "power of sale" clause means that the lender can take your home without taking you to court if you are behind in your home mortgage payments. Because of this "power of sale" clause allowed in New Hampshire home mortgages, New Hampshire is called a "non-judicial" foreclosure state.

A non-judicial foreclosure in New Hampshire can happen very quickly.

Take a look at the following time line from the HomeHelp web site to understand the process that shows you can lose your home in less than 120 days if you do nothing.

Here are the steps to losing your home:
1. Default: Meaning, you are not current in your home mortgage payments. If you do not cure the default, you will soon receive an acceleration letter from the "mortgagee" (a "mortgagee" is the person or entity holding your mortgage and you, the borrower, are the "mortgagor") telling you that you need to pay the past due amounts within a certain time frame.
2. You may also incur late fees, penalties and the lender's costs and fees for the mortgagee's attorney for being in default - so being late in your mortgage payments may cause you to incur these $$$ additional charges.
3. After the acceleration lender, if you have not brought all of your mortgage payments, cost, fees and late charges current, the mortgagee is permitted to schedule a foreclosure sale of your home. The mortgagee must send you a notice of foreclosure sale at least 25 days before the foreclosure sale.
4. Mortgagee advertises once a week for three weeks before the foreclosure sale to publish the date and time that your foreclosure sale is going to take place.
5. Day of the Foreclosure sale:  An auctioneer on behalf of the mortgagee shows up on your front lawn on the day of the foreclosure sale and auctions off your home. Up to the point of foreclosure sale, you can "reinstate" by paying back the lender all the past due payments, costs, fees, late fees and penalties - again, it is not just paying back the late mortgage payments.
6. Whoever buys your home at the foreclosure sale has 60 days to record the foreclosure deed. The mortgagee may buy your home at a foreclosure sale auction in addition to a third-party.
7.  After the foreclosure sale deed is recorded, the new owner (often the mortgagee) will proceed to the process of eviction of the homeowner.

How do I stop foreclosure?
1. Lender consents:  Ask the mortgagee to adjourn the foreclosure sale and give them a reasons to do so - such as you have a mortgage loan modification pending, or you have a sale pending of your home that will repay the loan.  With respect to a loan modification, remember you can get FREE help in the State of NH from a Housing Counselor (click on our article regarding Housing Counselors which gives you the names and addresses of a free housing counselor near you).  If the mortgagee agrees to adjourn the foreclosure sale, it is very wise to get this in writing.  Or, you can pay the lender all of the back payments, late fees, penalties etc., that have accrued up to the date of the foreclosure sale, also called "curing the arrearages" - and then you can go back to making your normal monthly mortgage payments on time - but you normally only have until the time the foreclosure sale takes place to "cure the arrearages".
2. TRO:  You may be able to seek a temporary restraining order, also called an "injunction", in the state court to temporarily stop the foreclosure sale, but you need to give the judge a reason to stop the foreclosure sale and you need to do this before the foreclosure sale.  You must file for the TRO before the foreclosure sale. 
3. Bankruptcy:  File a petition in bankruptcy which automatically stops the foreclosure proceedings. In a Chapter 13 bankruptcy proceeding, you can have up to 60 months (5 years) to cure the back payments you owe to the lender and keep your home, as long as you can make the normal monthly payments going forward.  A Chapter 7 bankruptcy will also automatically stop the foreclosure sale as well; however, once the Chapter 7 case is over, the mortgagee can reschedule the foreclosure sale.

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