As COVID-19 related foreclosure moratoriums have ended, foreclosure rates have jumped. In August, foreclosures jumped about 69% from the prior month.
With forbearances coming to an end and budgets about to be stretched by the resumption of student loan payments in February, now is a good time to go over what to do if you are behind on your mortgage and may be facing a foreclosure. Here are a few simple steps to consider:
1. Read your mail
This may be the most important step: far too often people tell me that they didn’t know about a scheduled foreclosure sale until it was too late. Most of the time, it’s because they haven’t looked at several mailed notices or assumed it was just junk or spam mail. If you start seeing letters from mortgage companies or law firms, read them.
In Missouri, a notice of a foreclosure sale date is sent at least 20 days in advance by Certified Mail with a receipt you have to sign for. Oftentimes, if you’re not there to sign for it, the postman will leave a slip saying you have mail available at the Post Office. Go get it! You can’t delay the sale by refusing to sign for the letter or not picking it up. The sale will go on as scheduled regardless of whether you actually read the letter.
2. Don’t rely on the mortgage company
Here is a sad story that we have seen play out too many times: Someone learns that their home is scheduled to be sold on the courthouse steps. The homeowner calls the mortgage company and is transferred to the Loss Mitigation Department. A very nice specialist tells them that they can save their home — the specialist is going to put in an expedited loss mitigation request so that the sale should be cancelled.
Days go by with no news until finally it is 4 p.m. the day before the foreclosure sale. The homeowner calls the mortgage company and finally learns that their loss mitigation request was denied or is still in processing — and the foreclosure sale is still set for tomorrow at 10 a.m.. With only hours left before the foreclosure and the end of the day approaching, the homeowner isn’t able to do anything. The next day, their home is sold.
Don’t let the mortgage company lull you into inaction, and don’t think that they have made any kind of commitment unless you receive a written notice a sale has been cancelled. When it comes to saving your home: hope for the best but plan for the worst.
3. Call a bankruptcy attorney early
If your home is scheduled to be sold, don’t wait until the morning your house is being sold; call a bankruptcy attorney immediately. With a few limited exceptions, filing a bankruptcy is guaranteed to stop foreclosure of a home that you own. Clients are often amazed at how quickly we can stop a sale. We can usually get a Chapter 13 bankruptcy filed and a sale cancelled the same day as the initial phone call. But all this requires that you speak to an attorney ahead of time.
In the vast majority of cases, once a house is sold it is too late — so don’t let fear or anxiety keep you from talking to someone about how to save your home in time to do something about it.
Call the Sader Law Firm at (816) 561-1818 now to speak to a bankruptcy attorney about how to save your home from foreclosure.