Foreclosure Basics

When a borrower has become what the lender deems as habitually delinquent in their mortgage payments, the lender may legally seek to foreclose on the home or property.

The lender begins this process by be petitioning the court in a judicial foreclosure proceeding where the court will issue its ruling and final judgment of a foreclosure legal claim. The mortgage documents are filed to evidence the underlying debt and terms of repayment, which is set forth in the note. A complaint is filed in county court along with what is known as a lis pendens, which is a recorded document that provides public notice that the property is being foreclosed upon. After the court has ruled in favor of the lender, the property may then be sold as part of a publicly noticed sale or auction.

When the foreclosure is against a business property, it can be devastating for the companies currently conducting business at the location. When the property resident is the owner of the property, we may be able to assist you in negotiating an agreement with the lender to restructure the payment structure or develop an acceptable payment plan to get caught up. If the operating tenant is not the owner of the property, there may be legal standing to keep the property operational to continue to conduct business through the current leasing agreement.

Short Sales

With a Short Sale, the property owner - often the lender - has agreed to accept less than the remaining debt owed on a property, and to release all associated liens. The agreement does not necessarily release a borrower's obligation to pay the remaining debt - it only allows for the property to be resold without the balance attached as a lien.

Short Sales are used as an alternative to foreclosure when appropriate. A short sale can mitigate additional fees for the borrower, and allow for his or her credit to be less adversely affected.

Loan Modifications

A Loan Modification is another option for those facing a mortgage delinquency. The mortgage is essentially rewritten: a new interest rate, additional repayment years can lead to a smaller monthly payment. Any past delinquency is usually added to the back end of the mortgage, allowing the borrower a change to catch up on payments. Loan Modifications do not adversely affect a borrower's credit score.