Parade of Homes Real Estate Magazine, July 2023

Facing Foreclosure? Dos and Don’ts

By - Diann Brazeale

In tough economic times, some borrowers fall behind on their home loans. With the first few missed payments, the lender will assess late fees. As the loan gets seriously delinquent, the lender may refuse to accept payments and turn the account over to foreclosure counsel. At that point, either the lender or its attorney will send a notice of acceleration, meaning that the full amount of the loan is immediately due and payable. Very few borrowers can pay in full, so the next notice will be a notice of a foreclosure sale, scheduled about four weeks from the day of the notice. So what do you do?

DON’T ignore the situation. Inaction will not make it better and may leave you in the street.

DO be proactive. As soon as you fall behind on payments, contact the lender to discuss your options to catch up on payments or do a loan modification.

DO consider loan modification if the lender offers it as on option. With a loan modification, you can often extend the term of the loan to make up the missed payments at the end of the loan. Sometimes you can temporarily reduce the monthly payment amount if you can demonstrate hardship. Loan modification is a complicated process that requires a lot of documentation.

DO keep a record of every payment, every phone call, every letter, every document, and every other interaction with the lender. A lot of loan modifications fail to come to fruition because of missing documentation. Make sure you can prove you sent what you sent and when you sent it.

DON’T assume that a foreclosure won’t happen while you are working on a loan modification. Most mortgage lenders are huge organizations, and the foreclosure department and the loan modification department

often do not communicate or even know what the other is doing.

DO open your mail and pick up any certified letters that come your way. Missouri law requires that foreclosure notices be sent via certified mail. Some lenders will also send notice via regular mail. “I didn’t get the notice” is not a good defense to a foreclosure.

DO check foreclosure notices in your local newspaper, especially if you start seeing strangers inspecting your property. These people may be investors looking to purchase it on the courthouse steps.

DO contact an experienced attorney as soon as you get a notice of a foreclosure sale. An attorney can help you take legal action to stop the foreclosure. Sometimes this means filing a Chapter 13 bankruptcy, in which you can continue to make your regular payment and make up the missed payments over a period of three to five years. Other times it may be appropriate to file a lawsuit to enjoin the foreclosure or present the lender with notice of intent to redeem the property.

DON’T wait until the last minute to act. It takes time for your attorney to evaluate your case and set legal proceedings in motion. If you delay, your options may be severely limited.

DO contact Diana Brazeale if you are facing foreclosure. She is a real estate and bankruptcy attorney and the owner of Brazeale Law Firm, LLC in Branson, Missouri. She has twenty-five years’ experience in the practice of law, and has stopped many foreclosures in her career. She can be reached at (417) 334-7494.