Understanding the Foreclosure Process

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Day 1 to 15	Day 16 to 30	Day 45 to 60	Day 90 to 105	Day 150 to 155	Redemption Period
Payments due on the 1^st Late fee after the 15^th day Begin communication by contacting your Lender. Contact a MSHDA approved lender for refinance options.	Late charges are assessed. Loan is in default at 30 days. Lender sends notice of delinquency. Negotiate a work out plan what are my options?	Lender attempts phone contact. Lender sends demand or breach letter to the borrower pointing out that terms of the mortgage have been violated. Once the demand letter goes out all delinquent payments are due. Partial payments are not accepted.	Lender hires local attorney or other firm to initiate foreclosure proceedings. Adds about $1,500 to $2,500 to your costs. Interest continues to accumulate. Public Notification - Notice of Foreclosure at the local courthouse, details of the debt published in local paper for 4 consecutive weeks and notice posted on the home. Sheriff Sale - House sold at foreclosure sale or auction.	Title transferred subject to Redemption Rights of the owner. The sheriff's deed list the last date the property can be redeemed. Redemption period is generally six months, but can be up to 12 months if property is over 3 acres or there is more than 50% equity in the property. Warning: If you vacate the home the Lender can accelerate or shorten the redemption period. To get the property back you must pay: Mortgage + interest + late fee + court costs + attorney fees.	LIVE in the house " No payment " Maintain utilities " Maintain Insurance " General upkeep EVICTION - At the end of the Redemption Period you will receive an eviction notice. LEGAL NOTICE - You will be served with legal notice of action. You can appear in court. Date is set to actually have the Sheriff move your belongings to the curb.
As soon as possible contact Pamelia D. Brazil, Executive Director, pbrazil@circleoflovecdc.org
During this time if you can make a partial payment – make it. Don t commit to a workout plan if you cannot maintain it or make the payments. In most cases, the collection and foreclosure process continues while your request for a workout is under review. Make sure you are communicating with someone who has the authority to do a workout and get it in writing. Refinance - If you have an Adjustable Rate Mortgage (ARM) or if you have late payments find out if you are eligible for MSHDA's SAVE THE DREAM? Refinance Programs or the FHA Secure Product. Payments can be made beyond the 15 days, but 30 days late raises a red flag and can hinder your ability to refinance. Be Realistic – if you cannot afford to keep your home, list it with a reputable Realtor and sell it.
			To SELL the house – you must pay everything listed above or in the case of a short sale, get permission and a waiver of deficiency from the bank. Save Your Money to help you move. Avoid Rescue Scams D Don't give someone money who says they can prevent a Foreclosure D Don't sign paperwork you aren't familiar with
Become Informed of YOUR OPTIONS and COMMUNICATE! COMMUNICATE! COMMUNICATE!

Facing Foreclosure? You Have Options!

First Steps:
1. Repayment Agreement – A temporary change in terms and conditions that can exceed 12 months and requires a cash down payment.
2. Forbearance – a written agreement between mortgagee and mortgagor that consists of a plan enabling mortgagor to reinstate their loan. Payments can be suspended or reduced.
3. Modification – Permanent changes in terms and/or conditions of the note and security instrument.
4. Partial Claim or Advance Claim – Mortgagee/Insuring entity will advance funds on behalf of a mortgagor in an amount necessary to reinstate a delinquent loan.
5. Refinance – Taking out a loan to pay off an existing loan, with equity to enchance cash flow and keep home without burden of mortgage loan payments.

If Default is Incurable; Begin Saving your money to help you move
1. Pre-Foreclosure/Short Sale – Lender agrees to take less than amount owed to accomplish sale of property and avoid foreclosure
2. Deed-in-Lieu – Avoids foreclosure by turning the property over to the lender.
3. Foreclosure – Legal process for reclaiming real property from delinquent borrowers.
4. Sale of Home – Dispensing of property and transitioning to a more affordable form of housing.
5. Bankruptcy (Chapter 7) – Court absolves unsecured debt when there are no assets to liquidate for recovery.
6. Bankruptcy (Chapter 13) – A reorganization of debt to allow the debtor to pay arrearage over a time while maintaining regular payments as they occur.

Be Realistic – If you cannot afford to keep your home, list it with a reputable realtor and sell it.
Warning: Avoid Rescue Scams
1. DO NOT give someone money who says they can prevent a Foreclosure.
2. DO NOT SIGN paperwork you are not familiar with.

Be Informed of Your Options and Communicate with your Lender!
If you need help deciding which option is most suited to you or your loved ones, give us a call at 989-921-0569. We’ll be glad to help!!