Now that the moratorium has expired, foreclosure proceedings will pick up depending on where in the process they were paused. The Federal Housing Finance Agency (FHFA) requirements didn’t stop landlords from going all the way to the end of a foreclosure action or even foreclosing. It just stopped them from evicting the former homeowners from the property. When the eviction moratorium expires, those lenders are going to be free to begin evicting the former homeowners.
However, if there was a stoppage by the lender in the middle of the foreclosure process, then they may just pick up where they left off. If a foreclosure hasn’t occurred yet, then you may have a limited-time to stop foreclosure via bankruptcy. This is a decision that you want to discuss with a bankruptcy attorney as soon as possible.
What Happens With Cases Where the Property Was in the Middle of a Foreclosure When the COVID Driven Moratorium Was Put In Place?
In cases of foreclosure which was halted due to COVID, the distinction here may be between what is in the loan document and the law of the particular state. For example, here in Alabama, where a foreclosure starts will depend on whether it is a judicial or non-judicial, or a public or private, foreclosure. A private foreclosure takes place in a private meeting, without the use of the court system. The process of a private foreclosure will start over from the beginning. Advertising will take place again and resetting the date, but the owner will not need to be given notice of the default again since they were likely already given notice before the delay.
In the case of a judicial foreclosure, wherever the process stopped is where they must continue from. If it was paused at the beginning, that’s where they would start, if it was at the end, that’s where they’d come back.
Should Homeowners Consider the Option of a Short Sale, Over Restructuring a Loan, or Foreclosure of a Property?
When considering a short sale, the answer depends on the local real estate market. If the real estate market in your area is booming, it is possible to get a good price for the property and may be the time to try a short sale. A short sale may limit the amount of deficiency that you have to deal with or you may even avoid the short sale altogether by selling the property for a greater value than you owe.
If the real estate market is depressed in your area, you may have a harder time convincing a lender to agree to a short sale. They are probably going to be a lot more willing to allow the short sale if it can potentially minimize the lender’s losses or even get that lender back to even ground.
Should I Meet With a Bankruptcy Attorney Before My Foreclosure Proceedings Start?
As soon as you have an inkling that there’s a potential for foreclosure, you should meet with a lawyer to discuss your options. One of those options is likely to be bankruptcy. The earlier in the process you can engage a lawyer, the more options you may have available to you. The closer you get to the end of the line, the fewer options you will have. The best option for avoiding bankruptcy may only be available near the front end of your troubles. By talking to a lawyer early, you may save yourself thousands of dollars in legal fees, that you will otherwise have to deal with if you wait till the last minute.
Could Filing for Bankruptcy Now Save Me From a Foreclosure?
Filing for bankruptcy now may save you from foreclosure, depending on the value of your property compared to the value of the debt you owe on the property. If you have a lot of equity in your property then yes, filing for bankruptcy may help prevent foreclosure on the property. You may have to then use the equity that you have in your home to pay out other unsecured creditors over the term of the bankruptcy. On the other hand, if it’s underwater, it may not be advantageous to stop the foreclosure.
Is Filing for Bankruptcy the Best Option for Homeowners in Danger of Foreclosure?
If there is a potential for foreclosure, you should speak with an attorney early in the process, as soon as you see that there may be a problem. It will depend on your specific situation if bankruptcy is a good fit. To be able to make the best decision around bankruptcy it will depend on the value of the property and how much debt is tied to the property.
What Are Some Other Options Available to Homeowners Facing Foreclosure?
When facing foreclosure, the standard solutions include a restructuring of the loan or selling the property, either at a short sale or traditional sale. It is important to have a conversation with an attorney as soon as possible to negotiate a favorable agreement with the lender. With the help of an attorney, it is possible you can find a solution that works without having to go into bankruptcy.
Additional Information on Bankruptcy in 2021
If you think there is a financial cliff approaching, whether you are an individual or a business, I suggest you consult with a lawyer immediately. An experienced debt relief attorney will try to work out a plan to deal with your debt issues. Ignoring the problem is not going to help resolve your debt matter. You need to deal with it now, jump on it, and maybe you can save yourself a lot of time, trouble, and money.
For more information on Foreclosure Proceedings After Moratorium, an initial consultation is your next best step. Get the information and legal answers you are seeking by calling (205) 506-3354 today.