Mortgage Foreclosure: How to Avoid Losing Your Home
Authored By: Legal Aid Services of Oklahoma, Inc.
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To avoid losing your home in a foreclosure, you have several options:
(1) Come up with a lump sum that the mortgage company attorney will accept to reinstate the mortgage. This amount will be not only the past due payments, but also taxes and insurance that the mortgage company had to pay, and additional court costs and attorney's fees;
(2) Put your house on the market and try to sell it, pay off the mortgage, and hopefully net the remaining proceeds for yourself; or
(3) File a Chapter 13 bankruptcy to catch up on all the arrearage due.
You cannot file a Chapter 13 bankruptcy to stop the foreclosure unless you have regular monthly income. Your income from unemployment may be enough to allow you to file a Chapter 13 bankruptcy to save your home from foreclosure. However, whether this is realistic depends on how many more months of unemployment benefits you have and whether you will be able to get a job before your unemployment benefits run out.
A Chapter 13 bankruptcy would allow you to pay out the arrearage due on the mortgage over 3 to 5 years. During that time you would have to keep up the regular mortgage payments as well. You can file a Chapter 13 bankruptcy to stop the foreclosure any time until the confirmation of the Sheriff sale.
If the mortgage company allows the property to be sold without obtaining an appraisal, and the mortgage company chooses not to appraise the property, then the property cannot be sold for six months.
However, if the mortgage company intends to sell with an appraisal (which virtually always is the case) the process is as follows:
1. The mortgage company files a foreclosure action and serves you with the petition.
2. You file an answer within 20 days after service. (Please contact an attorney for assistance with filing an Answer).
3. The mortgage company files a motion for summary judgment.
4. Even though you have no defense, the court still has to wait 18 days before granting the motion for summary judgment. Many courts wait 30 days after the motion is filed before grant judgment to the mortgage company.
5. The mortgage company prepares a Journal Entry of Judgment for the court to sign and have filed. (This can take a week or more, or can be done within a day, depending on how quickly the mortgage company wants to finish the foreclosure).
6. The Sheriff appoints three people who appraise the property to be sold.
7. The Sheriff sends written notice of intent to sell property to owners of the property at least ten days before the sale date and causes notice to be published in the newspaper for two successive weeks. This notice includes the appraised value.
8. Sale cannot be held less than thirty days after first publication of notice in the newspaper.
9. On the day of the sale, the property must be sold for 2/3 of the appraised value as set by the Sheriff's appraisal.
10. If the property is sold for at least 2/3 of the appraised value, the mortgage company then causes notice of the sale and of the date of the hearing on the motion to confirm the sale to be mailed to all owners at least ten days before the hearing confirming the sale.
11. The hearing on the motion to confirm the sale will be set not less than ten days from when notice was sent. At this hearing, owners may appear and contest whether the property was actually sold for at least 2/3 of appraised value.
12. If the court confirms the sale, the new owner will obtain a Sheriff's deed to the property, At this point, if you have not vacated the property the Sheriff may obtain a writ of assistance and remove you.
You may redeem this property from the mortgage company by paying off the entire amount due plus the costs and fees incurred. You retain this "right to redeem" the property until the Sheriff's sale is confirmed by the court.