Foreclosure Prevention in St. Petersburg
St. Petersburg’s foreclosure process does not happen in a single function because it is a mortgage-only state. This means that judicial foreclosure doctrines are available for different types of judicial action.
Generally, there are numerous reasons why a homeowner goes into foreclosure. This can result from financial hardships like low wages, job loss, increased cost of goods, medical problems, and even inflation.
In this process, a lender files a lawsuit in a civil court against borrowers who failed to complete mortgage payments. When this happens, the borrower receives a foreclosure complaint and a formal summon.
Except the borrower pays what they owe, the court will instruct the lender to perform a foreclosure on the property. This foreclosure process can last four to eight months, except if a legal obligation arises.
In this process, several things can go wrong; in fact, you could lose your home. If you are facing such a situation, do not fret.
In this article, we will discuss several alternatives to prevent foreclosure in St. Petersburg. Below are the details;
1. Communicate with your mortgage lender
Your mortgage lender refers to the company that handles mortgage-related issues like payment and collection of homeowner’s insurance and property tax payments. Whether it is a bank or any other financial institution, mortgage lenders will acknowledge that individuals are struggling from one major life event to another.
This alone can affect a person’s ability to repay their mortgage. However, this is also one primary reason you must communicate with your mortgage lender.
Before contacting your mortgage lender about any difficulty with making your mortgage payment, ensure that you have all the necessary information ready for the conversation.
The necessary information you will need to provide includes the following;
- Details of your mortgage lender. You can either check the MERS database or monthly billing statement to get the information
- Account number for the loan
- A description of your current financial situation
- Recent financial documents
- Tax returns or loss statements that can be used for reference
- Other financial information from public assistance, unemployment, social security, retirement, disability, etc
- The list of all your household expenses
This process is often the next step to support reinstatement. In reinstatement, the lender may suggest a date when the borrower pays him the total sum of money owed.
However, in the course of negotiations, it may lead to forbearance. At this point, the lender may agree to payment being stalled for a short time while considering other loan payment options.
One reason why financial institutions agree to the combination of reinstatement and forbearance is that they are often confident that the borrower will have sufficient funds to complete the payment at a specific time. This can be through an investment, tax refund, insurance settlement, or hiring bonus.
3. Repayment plan
As the name implies, this involves coming up with a plan to repay the loan. Here, homeowners may be given another chance to continue making their monthly payments regularly.
They will also combine it with a portion of other due payments until it is completed. Homeowners must communicate with their mortgage lenders if their repayment plans appear long-term or leave them in permanent debt.
4. Mortgage modification
Sometimes, repayment options may involve an amount of money the borrower cannot afford if you consider their current account. In situations where homeowners can afford to pay their loans but not according to the repayment plan, a few changes could be made.
The lender can agree to modify the mortgage from the original loan to one more affordable for the borrower. These modifications can be done using any of these steps;
- Combining missed payments with the current loan balance
- Changing the fixed-rate, which involves changing an adjustable rate to a fixed rate
- Increasing the amount of time the borrower has to repay the loan
5. Partial claim
Partial claim only occurs in cases where the mortgage is FHA insured. Here a lender can offer to help the homeowner get a one-time free interest loan from a mortgage guarantor.
The purpose of this is to help bring the account to current. Homeowners might also be given extra time after this loan to repay the money owed.
However, not everyone qualifies for a partial loan. Only people capable of making total mortgage payments within 4-12 months due to a loan can be granted a partial claim.
After filing for a partial claim, the lender will be given the necessary amount needed to bring the mortgage current. However, homeowners will have to sign a promissory note while a lien is placed on their property till full payment is made.
Things to note when communicating with your mortgage lender
Before foreclosure, you might decide to call your mortgage lender to discuss any arising issue. It is important to note that this call is expected to happen more than once.
When you contact your mortgage lender, you will be given a “loan workout,” which contains all the necessary information, form, and instructions your mortgage lender will need. You should fill out the form and return it as soon as possible.
At this point, your form will be reviewed, and your mortgage lender will reach out to you to consider the solutions available. If you do not hear from your mortgage lender within 7-10 days, contact your mortgage lender again till you receive feedback.
Now you are in contact with your mortgage lender, here are some helpful tips to know.
- Take notes of all communication, including the date, time, and nature of contact
- Pay attention to the first and last name of the foreclosure representative
- Take note of the outcome of each call
- Always follow up oral requests with a letter
- Each letter should be sent through a certified mail so it can be on record that the mail was received
- Document each copy of the letter, including enclosures
- Do not miss out on deadlines given by your lender
- Always follow up until you get a feedback
Now we have every information you need to know to prevent foreclosure in St. Petersburg. We hope you can have your home using these details. Always remember that you are not alone in this process.