FORECLOSURE: AN INTRODUCTION
A foreclosure is the legal process wherein the mortgage lender or judgment lienholder forces the sale of a home by auction to either get the outstanding balance paid by the foreclosure buyer or takes back the title to the property.
There are hundreds of foreclosures each week in Hampton Roads, the Peninsula, and Richmond area. Most foreclosure sales are conducted on the Circuit Court steps of the city where the home is located. In Virginia, the mortgage lender does not have to file a legal action to foreclose. A trustee is assigned and responsible for following the legal requirements set out by state law which include notification to the homeowner. To understand all the requirements and restrictions on the mortgage lender the homeowner must consult not only state law but the deed of trust which can set out additional requirements. That is the legal mumbo jumbo.
CHAPTER 13 BANKRUPTCY
Chapter 13 allows a “wage earner” or working individual to set up a court-supervised plan to repay debt. Most commonly used to halt a foreclosure and repay missed mortgage payments while also restructuring other debt, Chapter 13 is a powerful tool in helping financially distressed individual keep their home and recover from financial setbacks. The Chapter 13 plan also has the ability to extend the time of repayment of debt and is general structured over a three to five year period.
The payment of the past-due amount can be negotiated. A Negotiated Repayment usually requires a forbearance agreement between you and the lender, and effectively stops any foreclosure action.
These agreements change the terms of the old mortgage. Frequently, the interest rate can be modified and the delinquent amount of the loan added to the outstanding amount.
In these agreements, the delinquent amount is used to create a second mortgage with no payments or interest made until the loan is paid off.
This is an arrangement where the borrower signs the deed to the lender to refinance the home and avoid foreclosure.
The home is appraised, placed on the market with a realtor, and sold within 3 months, even if short of a full payoff
Chapter 13 Bankruptcy Organization
Take the amount you are behind on the mortgage and repay it over a three to five year period.