Macco Law Group, LLP

When Is It Too Late to Stop Foreclosure?

When Is It Too Late to Stop Foreclosure?

The foreclosure process can be upsetting and humiliating. Many people often find themselves in financial pitfalls that they can’t climb out of, leading to them being overwhelmed and afraid.

You may ignore those calls from the mortgage company, but that will only result in problems. It’s much better to face the situation head-on to stop the foreclosure process from happening to your home.

If you are in danger of looming foreclosure proceedings or have received a pre-foreclosure notice, now is the time to act to get out of this situation before it’s too late.

The state of New York follows a judicial foreclosure process that requires court approval. It may be best to work with an experienced foreclosure attorney to know how to avoid foreclosure and get back to better financial standing.

Foreclosure sign in front of a two story house

What Is the Difference Between a Mortgage Foreclosure and a Property Tax Foreclosure?

A mortgage foreclosure is when a homeowner is unable to make mortgage payments and the mortgage lender forecloses on the property to recover the unpaid portion of the money. If you borrowed money from the bank or took out a loan from a mortgage company but then could no longer pay it, the lender has the right to conduct a foreclosure sale on your home.

A property tax foreclosure, sometimes called a tax lien foreclosure, is when the government forecloses on your property when you have unpaid property taxes. Every property owner is responsible for paying property taxes, and if you miss these payments for a certain period of time, the government can step in and seize your property for a foreclosure sale to recover the unpaid taxes.

What Is the Process of Foreclosure Proceedings?

In most cases of mortgage foreclosure, the timeline begins once you are 30 days late on your mortgage payment. After a month of missed mortgage payments, the lender must attempt to contact you to discuss your first missed payment.

If you do nothing about your missed payments, after 45 days your lender will send a written notice. After 60 days of missed monthly payments, your lender will likely inform you if there is a grace period and encourage you to create a repayment plan.

Once you are 90 days late, the mortgage lender will most likely send you a foreclosure notice or delinquency notice. If you continue to do nothing and are 120 days late on your mortgage payments, you will then receive an official foreclosure notice. At this time, the mortgage lender can list your home at the foreclosure auction.

When your home is up for public auction, mortgage lenders will start the bidding with the total amount that you owe them. This includes any back payments as well as legal and marketing fees for the foreclosure. If no one bids on your home, the lender begins the legal process to take over ownership, which can take several months. If you are still on the property, you must file for eviction to take possession.

Can You Stop the Foreclosure on Your Home?

If you’re wondering when is it too late to stop foreclosure or if you can stop it at all, you will be given ample notice once the process begins. You will also get the date for the foreclosure sale, which will be at the end of the foreclosure.

When your home is sold to the highest bidder, you won’t be able to reverse the process once the sale is finalized. However, you can delay foreclosure or even stop foreclosure to save your home.

There are a few ways to stop a foreclosure that you may be able to try before you lose your home. Most lenders will be willing to work with you to make a payment plan. This would allow you to keep your home and prevent your credit score from taking a tumble.

Here are the options you have to choose from before it’s too late to stop foreclosure.

File for Bankruptcy

You can file Chapter 13 bankruptcy, which allows you to restructure your debt and keep your home. This process can stop a foreclosure proceeding by granting you an automatic stay. If you choose this route, it is best to speak with a Chapter 13 bankruptcy attorney.

Your other bankruptcy option is filing for Chapter 7. This also halts foreclosure proceedings, but it only buys you a little time. A Chapter 7 bankruptcy lawyer can explain the pros and cons of filing for this type of bankruptcy to stop a foreclosure.

Loan Modification

With a loan modification, you work directly with your lender to adjust your mortgage payment. A payment plan is ideal if you can afford to make your payments now.

When Is It Too Late to Stop the Foreclosure for Mortgage?

Generally, if you are unable to make missed payments on your property, you will be better off filing for bankruptcy. This stops the process for foreclosure, and can even be done on the date your home will be sold at auction. You essentially have until the moment it is sold to stop the foreclosure sale.

With mortgage foreclosures, the lender sends a notice after it has been 90 days since the last payment you made. Following that, if you take no action, the lender files the paperwork with the courts for the foreclosure of your home.

You can either pay the amount you owe on the mortgage to avoid foreclosure or you can let it foreclose. This will likely mean you lose your home, though you do still have time to act.

Once you have gone 120 days without making payments, the property can be sold at auction according to state law. There will be a notice posted of the intended sale which will run for five weeks. You will essentially have those five weeks to try and stop this process on your home. It will involve making the entire balance of all the missed payments, which will include late fees and legal fees. Alternatively, if you are facing foreclosure, you can work with an attorney from a law firm that specializes in foreclosures and bankruptcy.

When Is It Too Late to Stop Property Tax Foreclosures?

If you are behind on property tax payments and received a notice of having your home foreclosed, all you need to do is pay the remaining taxes. The tax foreclosure timeline is similar to the process for mortgage foreclosures with a petition filed in court. You must respond in some way or else you will automatically lose your home by default judgment.

However, the good news is that New York provides a redemption period that gives you some time to save your home. One way to immediately stop the sale of your home, especially if you can’t pay the property taxes you owe, is to file for Chapter 13 bankruptcy. Your payments will be restructured with the city treasurer and your creditors.

If you had a valid reason for not paying your property taxes, such as being on active duty with the military, you can also stop the foreclosure of your home. It may be much easier to do this with an attorney who can ensure you understand your rights.

Once the foreclosure date is set and the foreclosure begins, you still have time to stop it before your home is sold at auction.

How to Get Help Stopping Foreclosure on Your Home

When you have credit card debt that snowballs out of control, job loss, or other predicaments that have tarnished your credit report and made your financial situation complicated, you may feel hopeless. However, you can talk to a housing counselor when you get your first notice warning of foreclosure.

Unfortunately, most people who face financial hardship like this are afraid to say something to the lender. They let the situation fester for a few months until it all spirals out of control. Foreclosures, whether mortgage or property tax, can be difficult to understand. You should explore your options and see if filing for bankruptcy might be the solution you need to help you keep your home without having to pay the entire mortgage all at once.

When borrowing money is impossible and you don’t want to contact a real estate agent for a short sale, try not to wait until you get a formal notice. Instead, contact Macco Law Group today for a free consultation that will help you find the best course of action in your situation.