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Mortgage Foreclosure FAQs: Understanding Your Foreclosure Rights

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Understanding Your Foreclosure Rights

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The Coronavirus Aid, Relief, and Economic Security (CARES) Act offers mortgage relief for homeowners with federally backed mortgages. The act offers a foreclosure moratorium and the right to forbearance if you are experiencing financial hardship due to the COVID-19 coronavirus pandemic. If you do not have a federally backed mortgage, contact your mortgage servicer to discuss your relief options.

If you’ve fallen behind on your mortgage payments, the threat of foreclosure can become overwhelming. Struggling homeowners might feel inclined to simply accept their fate—there’s no getting out of foreclosure, right? But when it comes to mortgage foreclosure, remember that you have options.

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    Understanding those options and what you can do if your house is in foreclosure can help you mitigate the damage done to your credit and overall financial health. It might even help you take action to keep your home. We’ve gathered some general information regarding foreclosures to help you get an idea of how it works. State laws vary significantly, so work with a legal professional to determine the laws governing your foreclosure proceedings.

    Foreclosure Defined

    Foreclosure means that your mortgage lender can legally repossess your house due to nonpayment. They can then sell your house to help repay the debt you owe on it. This is true whether you are behind on your first or second mortgage. Your mortgage agreement will define when your lender can begin the foreclosure process. This is typically determined by the length of time you are behind on your payments.

    Keep in mind that every state has different rules and regulations for foreclosure procedures, and many states offer exceptions to this that may work in your favor. If you think you may be in danger of foreclosure, work with a legal professional to determine your state’s guidelines. For example, in some states you have to miss a certain number of payments before foreclosure processes can begin. Some states may also allow you to reinstate the loan up until a specific deadline.

    What Happens When a House Goes into Foreclosure

    The foreclosure timeline can vary significantly. State and Federal laws, your mortgage agreement and the mortgage holder’s motivation are major factors. In many cases, the foreclosure process starts three to six months after you miss your first payment, assuming you don’t make or catch up on payments.

    State laws vary, so be sure to work with a legal adviser or your lender to determine what will happen in your specific situation. In general, mortgage foreclosure involves the following steps.

    1. The mortgage holder gives the defaulting homeowner a written notice of default. This is a formal notice that you have fallen behind on your payments and are in default.
    2. The homeowner is given a limited period of time to cure the default and pay all amounts due. That can include interest, penalties, attorney charges and any other fees allowed by your state’s laws and your mortgage contract.
    3. Once the time allowed for the homeowner to cure the default has passed, the mortgage holder will give notice of a foreclosure sale. This is the actual day of foreclosure.
    4. Many states have a redemption period after the foreclosure sale, allowing you to reclaim your home.

    Foreclosure and Your House-Related Debt

    Foreclosure actions can wipe out some of the property owner’s debt, such as the original mortgage, home equity loans and second mortgages. If the proceeds of the foreclosure don’t cover all the costs of your second mortgage or other home equity loans, you are still obligated to pay those.

    In some cases, you might also be responsible for some of the mortgage payment, even after losing your home. If the property sells for less than the balance owed on the original loan, a lender could file a deficiency judgement against you in court, which requires that you repay the difference. This also gives the mortgage holder the right to collect the remainder of the debt owed from any other assets you might have. Not all states allow deficiency judgments in all circumstances. Work with a lawyer or legal adviser to determine your rights and plan of action.

    Lenders’ Obligations in a Mortgage Foreclosure

    Lenders have different obligations in different states. However, when it comes to mortgage foreclosures, they all typically follow at least three common requirements.

    1. Notice of default. In most states, lenders are required to provide a homeowner with sufficient notice of default. The lender must also provide notice of the property owner’s right to cure the default before the lender can initiate a foreclosure proceeding.
    2. Written proof of money owed under the mortgage. Lenders are usually required to file statements that itemize the amount the property owner owes under the mortgage. The amount owed includes the principal, interest, late charges, attorney fees and any other charges the lender is permitted to charge under the terms of the mortgage or the laws of the state.
    3. Servicemember relief. Lenders are also required to certify in writing that the property owner is not a member of the armed services before initiating a foreclosure action. The Servicemembers Civil Relief Act is intended in part to protect deployed active duty service people. If you are a member of the armed services, consult an attorney about your rights as they concern foreclosure proceedings.

    Ways to Stop or Prevent a Foreclosure

    The best way to stop a foreclosure is to take action to prevent the lender from beginning the process. When possible, try these proactive ways to save your home from a foreclosure.

    • Catch up on your default. In many cases, the first notice of default provides you with options for catching up on what you owe. If you can make up your payments and stay current, the lender is much less likely to foreclose.
    • Ask for a loan modification. Many lenders will work with you if you need help making your loan payments. Modifications can help you catch up on late payments or potentially reduce the amount you pay temporarily if you’re experiencing financial hardship.
    • Request a short sale. If you can’t afford your home anymore, you can request a short sale. The lender has to agree to a short sale, but if they do, you can sell the house to a third party for less than you currently owe. In some states, the difference is forgiven, while in others you may be required to pay the difference between the sale price and the remaining loan amount. A short sale will affect your credit, but the effect will be less than that of a foreclosure or bankruptcy.
    • File for bankruptcy. Filing a bankruptcy petition that includes your mortgage puts an automatic stay in place. This means that lenders can’t continue any type of collection procedure until the bankruptcy has been resolved or dismissed. Whether or not you keep your home depends on what type of bankruptcy you file and whether you can work out mortgage payments in the future. Filing for bankruptcy can have severe consequences for your credit and finances. Consult with an attorney before moving forward with this option.

    Defenses Against Foreclosure

    If the lender has already filed for a foreclosure and none of the options above will work for you, you might be able to legally fight the filing with a technical or substantive defense. Only you and your attorney can determine how to proceed through the process.

    Technical defenses are defenses to the foreclosure proceeding itself. One example of a technical defense is when a property owner is not given adequate notice of the default and proceedings. However, technical defenses are often not very helpful in preventing foreclosures because a mortgage holder can easily correct the defense by correcting the procedural defect. In the example of lack of adequate notice, a mortgage holder can defeat the defense by issuing a new default notice and beginning the proceedings over again.

    Substantive defenses use the terms of the mortgage itself to halt a foreclosure. Here are some examples of substantive defenses to the foreclosure process:

    • You really aren’t in default, and the debt and interest have been paid on time according to the terms of the mortgage.
    • The mortgage holder committed fraud in obtaining the mortgage.

    If you believe you may have a legal reason to stop the foreclosure, you need to file an objection to the sale with the court. In most states, you can file objections before the foreclosure sale takes place, after the sale takes place or before the court ratifies the sale if the sale was improperly conducted. Work with your attorney to determine whether this is the right move for you.

    Tax Issues Related to Mortgage Foreclosure

    When a debt is forgiven in a foreclosure action, taxpayers are considered to have made money. That means that the taxpayer or property owner may owe taxes on the difference between the value of the home and what is owed on the mortgage and forgiven in the foreclosure action. You will want to work with your tax professional to help determine your tax responsibility in this situation.

    Consider this example to understand how it might work:

    • You owe $120,00 on the home. The bank sells your home for $100,000
    • The bank accepts the $100,000 it got in the sale and forgives the rest of the debt via foreclosure, which means it doesn’t seek to collect that money from you.
    • The IRS considers that $20,000 as a form of income because it’s money you should have had to pay but didn’t. You might owe taxes on that $20,000.

    How Mortgage Foreclosure Impacts Your Credit

    Short sales and other foreclosure proceedings can drop your credit score by a substantial amount. Likely, even if you stop the foreclosure and get back on track, your credit has taken a hit because the late payments would have been reported. Foreclosure will appear on your credit report for seven years. And in many cases, you will be required to wait two to eight years before you can purchase another home.

    No matter what happens with a foreclosure, it’s a good idea to find out where your credit stands and how you can work to improve it. That way, you position yourself to be able to find a new home in the future—whether you buy or rent. Sign up for the Credit Report Card today to get a free look at your credit history and better understand how you’re doing with the five factors that impact your score.

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      • Gerri Detweiler

        No – not only will that not work it could create additional problems. I would suggest you read Underwater On Your Home? Your Six Options and then make sure they understand all their options and get the help they need to make the best decision they can in these difficult circumstances.

      • Gerri Detweiler

        if your home was properly foreclosed upon, you no longer owned it and you would not benefit from the subsequent appreciation. You may want to talk with a consumer law attorney if you think there were irregularities in the foreclosure process. It wouldn’t be unheard of.

      • Gerri Detweiler

        If you can’t pay your rent the landlord can begin the eviction process (it’s not called foreclosure in the case of a renter). Unless she lives in some kind of income-based public housing, I don’t know that the fact that she rented a place she couldn’t afford is any reason for the landlord not to start eviction. Landlords generally aren’t required to reduce rent payments because someone can’t afford them. You may want to try to contact local social service agencies to see if there are rental assistance programs that would help her afford her rent. (I hope I understood your question!)

      • Gerri Detweiler

        I am not sure how it works if you are in foreclosure for the primary mortgage and there is also a second mortgage. Have you spoken with a bankruptcy attorney to find out whether you may be able to save your home? Even if you can’t, you should talk with them because Congress has not extended the Mortgage Debt Forgiveness Tax Relief Act (at least as of the moment), you could potentially wind up with a big tax bill if your home goes into foreclosure. Bankruptcy could spare you that problem.

      • Gerri Detweiler

        Faith, you need to talk with an attorney familiar with this type of debt as soon as possible. That may mean finding a bankruptcy attorney with experience in foreclosure debt. It’s possible the company may try to sue you for the balance. However, it’s also possible that the debt is too old (statute of limitations has expired). Still another possible scenario is that you are sent a 1099-c reporting this as cancellation of indebtedness income. I assume this is a large amount of money, and therefore I recommend you get professional advice.

      • Gerri Detweiler

        This can be a real problem for homeowners who lost their homes. You’ll need to talk with a real estate attorney to see what can be done to get your name off the property.

      • Jim

        We had foreclosure papers served on us by the lender holding our home mortgage note. We appeared at the 1st hearing and were informed the lender didn’t have all their documents to proceed. The hearing was dismissed. The court granted an Order for Mediation. We are preparing for this. Now, our lender (bank) sells our note to another lender (bank). The attorney of record for the 1st bank sent a Motion for substitution of parties changing the existing suit to the 2nd bank (neither banks are affiliated with each other). Now the 2nd bank is the Plaintiff suing for foreclosure in place of the 1st bank. We never got copies of any of the reassignment documents; Motion, Proposed Order…. so we had no way to counter. Is it legal for one bank to sell a note to another bank and have the 2nd bank now the suing party? Doesn’t the 1st party have to close their case and the 2nd party have to start their own procedure even if the law firm is the same for both banks?What document do I file to argue this if any?

        • Gerri Detweiler

          I am sorry Jim, as much as I would love to be able to help you I am not an attorney and can’t offer legal advice. I will have to suggest you consult an attorney for help.

      • Gerri Detweiler

        I don’t know how you could claim the taxes and PMI they are paying, but suggest you ask a tax professional. You may want to post this question at

      • Gerri Detweiler

        If you are in a Chapter 11 or 13 reorganization process then you may be able to continue operating the business while you restructure. Please consult with a bankruptcy attorney. This is not a DIY project.

      • miller m

        we have a rental property that has been a money pit for us. And to top things off, our insurance dropped us because it’s a vacant property after it all the copper pipes were stolen. We are done after 9 years. How do we give the property back to the bank and walk away from it?

      • mary

        In case of deed of trust can the lender keep the repossed property without reselling it?

        • Gerri Detweiler

          I don’t see why not but most lenders (like banks) don’t want to hold on to property because of the carrying costs.

          • Haley Morrison

            Do you know if the deed of trust has to ask the court not to foreclose on the property?

      • Mary

        I am a novice investor who would like to participate in online foreclosure auctions. I have been reading as much as I can, but I cannot seem to find a definitive answer regarding the rights of a second lienholder (such as a second mortgagee or a Homeowners Association). Can someone explain what happens in a situation like the following.

        A judgement on the property I am interested in bidding on is awarded to Citimortgage for $50,000. Auction is to be held August 1st. Citimortage (Plaintiff) maximum bid is $50,000 . There is a second morgtgage held by BOA for $75,000, but BOA has not brought an action against the property owner. I assume that BOA could bid on the property to protect its interest, but if it does NOT bid on the property and I am the winning bidder, do I face any action from BOA or do I owe BOA any money for its lien on the house? For example, if my winning bid is $55,000, CItimortgage probably owes BOA $5,000. But do I as the winning bidder have any liability to BOA for the remaining $70,000 second mortgage?

        • ScottSheldonLoans

          Hey Mary,
          I believe you would know if there is any monetary damages owed when you submit a bid. There would need to be some form of disclosure provided by the trustee’s to you as the buyer.

      • mark

        my house was in foreclosure with an auction date set. I claimed bankruptcy and the bank got relief from the bankruptcy. How soon can they set an auction date at this point?

        • Gerri Detweiler

          Mark – That’s a question for your bankruptcy attorney. It depends on how foreclosures proceed in your state (judicial vs. nonjudicial), and a lot of other factors. Hope it works out OK for you.

      • Lake County FL Borrower

        I sold my home via a short-sale in 2012 in which both the 1st and 2nd Mortgage Lenders agreed to the Short Sale and there was complete debt forgiveness. The 2nd Mortgage Lender has reported the transaction as a foreclosure and not a short-sale, even though I have resubmitted the Lender Authorization to Short-Sale, the Release or Satisfaction of Mortgage and the dismissal and discharge of the Lis Pendens. The 2nd Mortgage was transferred to SLS Loans, however, they continued to report into Flagstar. Flagstar indicates that since a foreclosure for the 2nd was initiated that it is reported as a foreclosure regardless of the fact the foreclosure was stopped and home sold. Obviously, this is gravely hurting my credit and since I am 2 years post my short-sale I thought things would be looking up vs. now being held to a 7 year ‘hold’ for a foreclosure that did not occur. Please advise if there is anything I can do to further clear up this issue? Thank you.

        • Gerri Detweiler

          My understanding is that foreclosure is similar to a bankruptcy in that if it is initiated, it can be reported for up to seven years even if it wasn’t completed. (Bankruptcy cases that aren’t completed can be reported for up to ten years.) Because a foreclosure filing is typically a matter of public record, it can be difficult to get removed. I assume you were represented by an attorney kn your short sale? If so then I’d recommend you talk with your attorney. If you weren’t then you can visit to find an attorney in your area to discuss this with.

        • ScottSheldonLoans

          Agreed, with Geri get an attorney that specializes in credit remediation. You should have them sending the HUD and lender short sale approval lender to the lender reporting as foreclosure, because that is wrong and should report”settled for less than full balance” the words short sale won’t usually report.

      • SAGG

        How many times can a mortgage company keep reporting when you in foreclosure.Ours does it 3-4 times a month

        • Gerri Detweiler

          Hmmm…what exactly are they reporting?

      • Gerri Detweiler

        I guess that’s where I am confused. Most lenders report on a monthly basis. Are these separate tradelines or are they just updating the same account frequently? It’s a little hard for me to advise without understanding exactly what’s on there.

        Is it accurate? If it is, then there’s probably not a lot you can do about it. If it’s inaccurate then of course you have the right to dispute it.

      • Steve

        My home was foreclosed in 2010, yet at the time I was uncertain of what to do with the Heloc and kept making the monthly payments. I have had this Heloc since 2007 and the principal never reduces. In the 7 years Chase has received over $5K in interest payments. I have tried to speak with them and they only send me a Loan modification form. Which confuses me since I have not had that house for 4 years. Any suggestions? Do I continue to make payments, walk away, or what?

        • Gerri Detweiler

          First, if the principal has never gone down then you are probably in an interest-only period. At some point, the loan begins to fully amortize and payments increase.

          Nevertheless, you need to talk with an attorney asap. If you simply walk away they may a. send you a 1099-C which could result in a big tax bill for you and/or b. try to sue you for the unpaid balance. Consult a consumer law or consumer bankruptcy attorney. Visit for a referral.

      • Gerri Detweiler

        It’s probably more an instance of where a law doesn’t prohibit it rather than one that allows it. But I’d suggest you contact the Consumer Financial Protection Bureau to file a complaint and see what happens.

      • rene

        hi, i am in california. our house foreclosed in 2010 and BofA resold it in 2011. i noticed that we were still getting negative credit reports every month for being 180+ late on the 2nd mortgage. at the time, i read–and now i’ve forgotten the term–that it’s illegal in california for banks to do this, provided it’s a 2nd mortgage, and not a HELOC. i cannot readily find this information now.

        2-3 years ago i called BofA multiple times to ask them to stop the negative reporting. it went into a long period of avoidance on their part. i should have written to them, but fear took over & i was afraid to document myself into a demand for full payment. and then i let it drop.

        now it’s 2014 and the negative reporting has never stopped. what do i do? is it illegal? if they stop the negative reporting will my credit be fixed retroactively, or only as of the date of resolution.

        here is an image i edited from my credit report. you see the 1st mortgage is green in june 2010. and all of the area i colored dark green in the 2nd mortgage represents the nasty reports.

        thank you for any guidance you can give. sincerely, rene

        • Gerri Detweiler

          Rene – Thanks for providing that information. It is super helpful. When I have looked into this the answer I received is that the status is still 120 days past due. In other words, since you didn’t catch up it will continue to report like that for seven years. However, this is not a legal opinion and I’d encourage you to also check with the Consumer Financial Protection Bureau.

          • rene

            thank you very much gerri. from what you researched, it sounds like it’s legal. if it is, and if it’s continued to be reported for 7 years, then it will take another 7 years for the negative reporting to age off. that’s 1/4 of my life.

            i did not catch it up because the bank got the house. and then it resold it, and was bailed out by the government. well, i just can’t see how that could be right. even if it’s legal, it’s ethically wrong.

            i will look up consumer financial protection, tysm.

            • Gerri Detweiler

              You’re welcome and please keep an eye on this thread as I have asked a consumer law attorney to weigh in as well.

      • Kevin

        our home has been foreclosed on and sold how do I get off my credit

      • Credit Experts

        Rebecca —
        Sorry to hear you lost your house and continue to struggle with it. We are not attorneys, though, and in this situation, your attorney is probably the best person to ask about your rights.

      • Gerri Detweiler

        Amy – You need to talk with an attorney yourself to learn how to protect whatever interest you have in the home. Find a consumer bankruptcy attorney in your area (NACBA is one source to find one) and talk with them asap. Hopefully you can remain in the home and continue making payments without any problem, but this is a situation where you really do need legal advice.

      • Gerri Detweiler

        Not always. It depends on whether the loan was a recourse or non-recourse loan, among other things. Some debtors will be contacted by collectors trying to collect a deficiency and/or they may owe taxes on the amount written off. That’s why I recommend always consulting with a consumer bankruptcy attorney if you are going through foreclosure.

      • jean

        i have a rental home in southern califrnia. i haven’t made a payment in almost 3 years. why is the bank taking this long to foreclose? is it because it’s only worth 1/3 of what is owed on it?

        • Gerri Detweiler

          It is hard to tell Jean. They may have a backlog, or your file has slipped through the cracks, or who knows? However, since this is a rental property I would strongly encourage you to talk with both a consumer law attorney with foreclosure experience AND a tax professional very experienced with 1099-c forms. That’s because even if you are lucky enough to get out of this without being sued for the deficiency, you may still get a 1099-c reporting the “cancelled” debt as income. And that could result in a big tax bill for you. I don’t mean to alarm you, but we get so many stories here on the blog from people who learned too late that they should have sought professional advice.

      • bajohannes

        My home was forclosed in 2010 and the amount it was sold for at auction was greater than the sum of my 1st and 2nd mortgates. I have still received communications indicating I still owe $40,000 (2nd mortgage balance at time of foreclosure) on the 2nd mortgage. This does not make sense to me. Shouldn’t the 2nd mortgage have been paid off with funds from the auction sale? To to be honest I’m not certain who to contact at this point about the balance. Any ideas on how I should proceed?

        • Gerri Detweiler

          You need to talk with a real estate attorney familiar with short sales. If you really don’t want to go that route you could try filing a complaint with the Consumer Financial Protection Bureau, but given the amount of money involved, I’d talk with an attorney if I were in your shoes.

      • Gerri Detweiler

        If it’s not clear how long the items will remain on your credit reports you may want to contact the credit reporting agencies for clarification. As for the reporting of the Ocwen account, my understanding is that if it was charged off and the information reported about it is accurate, it may still be reported even it was a non-recourse loan. You may want to consult a consumer law attorney for clarification but I haven’t heard any information to the contrary.

      • Scot

        I have tried to work with the lender for over 2 years on a modification and got no where and then had an agent place the home for short sale and the lender kept jacking up the price. My home was to be sold at auction yesterday what do I do now? Where can I turn for advise? Will property managers rent to me?

        • Gerri Detweiler

          Scot – I am sure this has been incredibly stressful for you. And while one phase is over there are a couple of other things you need to consider.

          1. Are you certain that the lender can’t come after you for the balance? Did your short sale contract cover that? If not then you should talk with a consumer bankruptcy attorney asap to find out what the lender may or may not do to try to collect any remaining deficiency from you.

          2. You need to figure out whether you may owe taxes on the cancelled debt. Since Congress has failed to extend the Mortgage Debt Forgiveness Relief Act it is possible you could wind up with a tax bill from this. But you may qualify for the insolvency exclusion. More info here: 1099-C In the Mail? How to Avoid Taxes on Cancelled Debt

          As far as your credit is concerned, it probably has taken a hit but that doesn’t mean you can’t rent; however, you may have to be willing to put up a larger security deposit if you can to assure the landlord that you will pay the rent.

      • freespirit31371

        I had a question. I am off work on FMLA and currently behind on my mortgage payments. I uploaded necessary docs for modification over a month ago. I called today and they stated it can take up to 45 days. My question is, if I decide to sell the home, will the lender get to keep all the funds? example say I owe $76,000 and sell it for $90,000 does the lender get the full amount or will I receive the difference back? Thanks for your help!

        • Gerri Detweiler

          If your home sells for more than is owed you should get the difference, minus any closing costs and/or real estate commissions you have to pay. Keep in mind the payoff amount could be higher than the amount listed on your statement.

      • trathman

        Hello, I live in California and I’m currently in a chapter 13 bankruptcy that was necessary to stop foreclosure on my home. The bank NOD was issued in May of 2013. I filed BK August 27th 2013. Is it true that the foreclosure filing can only remain active for one year before a new NOD must be refiled? I was told a foreclosure is only valid for one year and then must be refiled if the action has not taken place. Is this correct? Thank you!!

        • Gerri Detweiler

          I don’t know the details of the procedures in California. Are you working with a lawyer to file bankruptcy (I hope!)? If so this is a question they should be able to easily answer for you.

      • Mary

        Hello I built and have owned a home since 2004 about 5 years ago a bunch of hurricanes happened and interest and insurance and tax rates went up making it hard for me to make any payments to my home. Since then my home has been in the mist of foreclosure the bank is looking to close on my home within the last 5 years. As of now they are saying I owe around 320,000 on my home when I purchased it for 120,000 originally. With that said I am willing to work with the bank and make payments but my husband is unemployed and the bank is stating that they want 3,000 a month to save my house with me, my husband, and four kids. This is way too much for me to accomplish. Is there anyway that I can get them to work on a payment of 1,500 a month with me or to do something different that I can save my home without having to pay so much towards it?

        • Gerri Detweiler

          Mary – I am so sorry to hear what you have been through. Have you met with a bankruptcy attorney? If not please do so right away. The attorney may be able to help you keep your home, and catch up on payments. If not, then he or she may be able to help you move on without the threat of a potential lawsuit over your head. At this point your options are going to require legal advice. I don’t see any chance that you will be able to get your payments and balance down to something workable without legal help.

      • Gerri Detweiler

        Bob – I wish I knew what to tell you. I am not sure what you are trying to accomplish – foreclose on the house? I don’t know what else to advise you other than to continue to look for a real estate attorney to help you. I am sorry I can’t be of more assistance.

      • elaine

        If my husband stops paying the mortage and let’s the house forclose which my name is not on.. but the deed is in both names will it effect me?

        • Gerri Detweiler

          Elaine – You need to consult with a real estate attorney in your area. Typically if you are not on the loan then the foreclosure won’t affect you, but in some situations the lender has to take action against anyone who owns the property in order to foreclose and get the right to dispose of it. So it’s possible that you can get dragged into this even though you aren’t the loan. Again, a real estate attorney can clarify the issue for you.

      • Jennifer

        Our house was foreclosed on in 2011. If the bank sells the house for more than we owed, shouldn’t the whole thing come off our credit report? Or, should the difference be all that shows instead of what we owed at the time? If they MADE money in the deal, I think it should come off completely.

        • Gerri Detweiler

          Unfortunately Jennifer that’s not the way it works. The foreclosure is public record and the fact that they had to foreclose remains on your credit reports for seven year. Other lenders don’t really care whether the bank made money on the deal: they are interested in your payment history and the fact that you didn’t pay the mortgage affects your credit scores.

      • Gerri Detweiler

        Dianna – Go to see a bankruptcy attorney. Visit
        NACBA to find one in your area. We laid out various options for when you are underwater on your mortgage in this article: Underwater On Your Home? Your Six Options

      • Gerri Detweiler

        I am a little confused. Who placed a charge off on your report? A different one than the company that reported the foreclosure?

        • grayglass76

          This is the same company with the foreclosure had now added the charge off.

          • Gerri Detweiler

            Hmmm…was there a deficiency balance perhaps? It’s a little difficult to tell if it’s correct – but I wouldn’t rely on their word that it is! Certainly with all these foreclosures we have seen wrong information posted to credit reports. Have you tried disputing it?

            • grayglass76

              We have asked for an explanation. They assured us their account is correct-HA! We feel that this is fishy but wanted a second professional opinion before we disputed this. Who do we contact for assistance in the dispute with the mortgage company? They have made it clear they are correct and not very willing to do much for us. Is there a special lawyer or counsel we go to? No idea how to proceed.

              • Gerri Detweiler

                You could start first with the Consumer Financial Protection Bureau, or you can visit the National Association of Consumer Advocates website to find a consumer lawyer in your area.

                However, i think it would still be in your interest to file a written dispute with each of the credit reporting agencies that are reporting it (keeping copies of your credit reports/dispute letters for your records). That’s going to protect your rights under federal law.

      • Gerri Detweiler

        Tammy, if a foreclosure has been filed in this is a legal matter and I would encourage you to get legal advice. I’d hate to see you pay this amount and then discover they can continue with the foreclosure anyway. If you can’t afford an attorney, you may be able to get advice from a local Legal Aid office.

        Also see my reply to Pamela’s question above.

      • Gerri Detweiler

        Pamela, I can’t offer you legal advice but you may want to ask your lender for a reinstatement quote or reinstatement letter. That should state the amount you need to pay to bring the loan current. If you can afford to pay the amount stated in that letter by the due date listed then you should be able to get it out of foreclosure. Make sure you get this information in writing, though, and keep a record of your payment.

        It has has to be handled properly. And really to be safe, I’d encourage you to talk with a real estate attorney, or if you can’t afford one, see if you can get help from Legal Aid.

      • Gerri Detweiler

        Both situations sound like such a mess. Have either of you talk to a real estate attorney? Another option may be to file a complaint with your state attorney general and the Consumer Financial Protection Bureau.

      • Gerri Detweiler

        Who knows?? But your friend should really consider getting legal advice so she can get it over with. If it’s still in her name she may be liable for injuries or municipal fees, and she could be sued for a deficiency or get a tax bill. The fact that she hasn’t heard anything doesn’t mean all is OK.

      • michel

        if you have filed for bankruptcy and months following then receive foreclosure notice ( which has been responded to by a lawyer) so it wasnt neglected paperwork.. they appraise the home for sale 1/3 of what the mortgage was for, is it possible to change the loan to that price to avoid the foreclosure of the home?

        • Gerri Detweiler

          Michel – You’re going to need to talk with your attorney on this one. “Cramdowns” are somewhat limited since bankruptcy reform but your attorney will need to advise you there.

      • Gerri Detweiler

        I have no idea.

      • Gerri Detweiler


        Sorry to hear what you’ve been through. You will need to run these questions by your bankruptcy attorney. Keep in mind that if you withdraw your bankruptcy before the discharge it will still stay on your credit reports for 10 years and count as if you had gone through with it. So you essentially get none of the benefit but all of the credit damage.

      • RebeccaO

        Hi Gerri: First, thank you for your thoughtful comments – they are very helpful to read. Typical of many on this thread my husband and I own a home that is underwater by approximately 30% of it’s original value. We owe upwards of $298,000 on a home recently assessed at $245,000 but have continued to pay faithfully for 5 years. The bank will not negotiate with us for a short-sale or other easement of paying the loan because my husband and I have a reasonable combined income. We moved 5 years ago in order to find jobs and have finally settled in a new home in another state. We are both in our 60s and close to retirement – and that would be at 70 – and have not been able to save any significant amount for retirement due to this second mortgage. Finally, after several bad months of commissions (husband is in sales) we could not sustain two mortgages and all our other financial obligations. We also learned that the only way to “force” the bank to work with us was to finally stop payment. We have a lawyer, a financial advisor and are aware of possible tax requirements – what concerns us is whether Social Security can be garnished like wages. There is no settlement other than forgiveness of the loan that won’t carry into retirement for us. I was wondering what advice you might have and thanks!

        • Gerri Detweiler

          It’s so frustrating that everyone seems to take for granted that the mortgage meltdown is over. But you’re a perfect example of people who are still struggling with no good solutions in sight. The only other thing I would suggest is to talk with a bankruptcy attorney to find out whether it might be possible to strip off the second by filing. Given your husband’s declining income perhaps it’s a possibility..?.

          It sounds like you’re doing everything you can to minimize the damage as best you can. Hang in there and let me know what happens.

      • Gerri Detweiler

        Please see a consumer bankruptcy attorney who also has experience in foreclosure defense. They may be able to help you work out a solution and if not they can at least help you understand your rights and options. Visit NACBA if you need help finding one.

      • Gerri Detweiler

        I can’t give you legal or tax advice as I am not a lawyer or tax professional. It sounds to me, though, that if they do send you a 1099-C you could fill out Form 982 and claim the bankruptcy exclusion. As for your credit reports, it is entirely possible the foreclosure will be reported if it ends up in the public record under your name. However, since you discharged it in bankruptcy it seems like you could challenge it. (I am not certain, though, as this isn’t a situation I have encountered before.) You may want to check your credit reports in a few months to see what shows up.

        As for this comment: “as the government has stepped in on alot of these short sales rejected by the bank”…???? They may be nervous about the recent CFPB enforcement action against a mortgage servicer for failing to properly process mortgage modification applications. I don’t know whether you can use that to your advantage, but why not try? File a complaint with the CFPB immediately and then see if perhaps your bankruptcy attorney is able to help – some also do foreclosure defense work. The attorney may also help you determine if it’s worth it to try to keep this house or if it’s best to move on.

        Hope things work out for you. I am sure this has been incredibly stressful.

      • Gerri Detweiler

        I’m sorry to hear the difficulties you been through. At this point it’s a legal matter and you really need to get legal advice. If you can’t afford an attorney you may be eligible for help through Legal Aid.

      • Andy

        Wife is only borrower on Florida foreclosing Countrywide/BOA mortgage loan, she signed the note only. Both of us signed security instrument/mortgage. My credit shows 4-years of late/missed payments and I never signed the promissory note, can I sue BOA for destroying my credit???

        • Gerri Detweiler

          It definitely sounds like you should consult a consumer law attorney with experience in credit reporting cases. Florida is not a community property state so it’s possible this is a mistake and you may have a case for credit damage, which could help you get your credit cleared up and also result in damages.

      • Gerri Detweiler

        Hmmm… Interesting. At this point I think just about anything is possible in the world a mortgage financing. However, it sounds like it’s unclear what will happen at this point. Have you talked to a housing counselor or a local legal aid office to find out what your rights are here? You will find some resources here:

      • Gerri Detweiler

        Your friend really really needs to talk with a consumer law attorney who handles foreclosure defense. Obviously there has been a servicing mistake and he has to find out what his rights are to resolve it.

      • corby

        after a 2 year span of not being able to pay our second mortgage, loan we called them and agreed to a monthly payment arrangement ( to keep in good standing), and now they are demanding a higher monthly payment 6 months later,or they will proceed with Forclosure, we never missed a payment and told them we cant afford an increase and can keep the payments as is, but keep getting harassed, please advise on an option

        • Gerri Detweiler

          A lender is not obligated to provide you with a payment that you can afford. If you can’t pay the amount specified in your contract when you took out the loan they certainly can proceed with foreclosure, and I would never trust an amount that a lender offered to accept verbally. I would really encourage you to meet with an attorney who handles both bankruptcy and foreclosures. Sometimes it is possible to get a second mortgage wiped out through bankruptcy, but you really need an expert to go over your situation with you. If you need help finding an attorney you can visit the NACBA website.

      • Gerri Detweiler

        I really wish I could advise you but I think you need to talk with a consumer law attorney. If you are not sure how to find one I can suggest two resources: one is the NACBA and the other is the website of the National Association of Consumer Advocates. I would be interested in hearing how this turns out for you.

      • Gerri Detweiler

        Great question. I don’t know the answer so I’ll have to look into it.

      • Brenda

        I live in Indiana. If my commercial building is foreclosed upon, can the bank collect the deposits I made to all my utility companies?

        • Gerri Detweiler

          I don’t know you’ll have to check with a local attorney. It’s hard for me to see how they can collect that money but I can’t say for sure.

      • Gerri Detweiler

        I am sorry I don’t know which question this refers to.

      • Gerri Detweiler

        I’m really sorry to hear that. Unfortunately, foreclosures can be reported for seven years from the date of foreclosure. This is one of the risks of walking away from a property without getting legal advice. The other risk is that you potentially could get a 1099-C which may or may not result in a tax bill. And I don’t know if it’s too late for them to go after deficiency if there is one. I would really encourage you to at least talk to consumer bankruptcy attorney familiar with foreclosures to find out your rights here. I’d hate to see you hit with any additional unexpected expenses.

      • Gerri Detweiler

        Yikes – sounds like you are either an identity theft victim or getting mixed up with someone else. Have you contacted the company that ran the background check?

      • Gerri Detweiler

        Holly – I spoke with an investigator at Identity Theft 911 who shared this advice.

        1) Get a copy of the background report from whoever she had run it. By they are required to release it. This will allow he to dispute the item with the company.

        2) She should also order a copy of LexisNexis personal report which should also show the foreclosure allowing her to get the details and dispute it to.

        Will you try it and let us know what happens? Please let us know if you aren’t able to get to the bottom of it.

      • Forlanda Peel

        my home was foreclosed on and sold back to the lender. I want notified that this was happening until the day before it happened. My letters from their attorney arrived the day before the sale. When I called their attorney asking about a reinstatement I was told I was too late because I didn’t respond to the letters. The certified copies of the letters showed up in the mail about 4;30 that afternoon day of the sale. They were postmarked two days before the sale. letters were dated 13 days before the sale. No notification ran in my local paper it ran in the county that the law firm is in over an hour away.I was told that I my loan was being processed for a loan modification by an executive from Chase. Is this legal ? Since they have already foreclosed without notice can I get my home back ?

        • Gerri Detweiler

          You will need to talk with an attorney familiar with foreclosure law in your state. If you can’t afford one, you may be able to get help through Legal Aid.

      • Gerri Detweiler

        Your bankruptcy attorney is your best source of advice here. I understand you are looking for reassurances, but working with an attorney who understands laws in your state is your best option.

      • Gerri Detweiler

        Not necessarily. It depends on the laws in your state. In some cases, the bank may own the property at that point. Or there may be fees they are entitled to. I would recommend you speak with a local real estate attorney.

      • Gerri Detweiler

        Matt is correct. The clock on the reporting period starts clicking when you fall behind. In the case of collection accounts, they can be reported for seven years plus 180 days from that date. Late payments may be reported for seven years.

      • Gerri Detweiler

        Have you spoken with an attorney? Please do! The lender may have made a mistake and the attorney may help you save your home.

      • Gerri Detweiler

        Before you walk away please talk with a bankruptcy attorney. It’s not as simple as just leaving. You may still be on the hook for bills, including any deficiency. At least if you file you can make a clean break.

      • Gerri Detweiler

        As much as we’d like to help, you really need to talk with an attorney. Procedures vary by state. You also need to find out whether you can be pursued for a deficiency and whether you may owe taxes for cancelled debt. Please get legal advice.

        If you aren’t sure how to find an attorney, you can use the search function on the websites of the National Association of Consumer Advocates or the National Association of Consumer Bankruptcy Attorneys.

        Also read:
        1099-C In the Mail? How to Avoid Taxes on Cancelled Debt

      • Gerri Detweiler

        Talk with a consumer law attorney. You may have a case for credit damage. If you don’t know how to find one, use the search function on the website of the National Association of Consumer Advocates.

      • Gerri Detweiler

        I urge you to consult a consumer bankruptcy attorney to find out what your options may be. Your home is severely underwater on this loan and even if you lose your home there may be financial and tax implications. A bankruptcy attorney with experience in loan modifications and foreclosures can help you understand your options.

        As for your question about PMI – it protects the lender not the borrower. We wrote about that here: Mortgage Insurance Shocker: Collections After Default

      • Gerri Detweiler

        My guess is that it would depend on the terms of the settlement. But you could always try disputing it with the credit reporting agencies to see what happens. If it is not confirmed it must be removed, and it’s possible the lender wouldn’t confirm it. I suggest reading: How Do I Dispute an Error in My Credit Report?

      • LC

        BOA foreclosed on my house and they sold it for the full balance of the 1st and 2nd mortgage (both held by BOA), yet they put the 2nd mortgage balance on my credit report. Any suggestions on how I can get this removed?

        • Gerri Detweiler

          What do you mean they put it on your credit report? Do your credit reports show an outstanding balance? If so, I would suggest you dispute it in writing. If it’s not corrected you may need to file a complaint with the Consumer Financial Protection Bureau or contact a consumer law attorney to see whether you have a case for credit damage. More in this article: A Step-By-Step Guide to Disputing Credit Report Mistakes

      • Phil

        Westgate Timeshare resorts foreclosed on the property that I was purchasing and put it on my credit, now I can’t buy a house. I stopped paying because I learned tat resorts are scams. Is there anything i can do to get the foreclosure taken off my credit.?

        • Gerri Detweiler

          You will probably need to talk with a consumer law attorney. Whether or not the foreclosure is considered legitimate will depend on all the facts and circumstances.

      • MIA


        • Gerri Detweiler

          Mia – Was the land owned free and clear by your parents separate from the trailer?

      • 10N3

        If my friend does a short sale on his house, and it gets bought by another corporation which markets houses, but my company decides to buy it from that corporation within 2-3 months, is there a chance the my friend would have to move out before my
        company is able to buy the house and give my friend back the deed to the house?
        And if my company buys the house, and my friend has the deed, am I able to kick him out still?

        • Gerri Detweiler

          As much as I’d like to help I’d suggest you get advice from a real estate attorney in your area.

      • dexter99

        Wells Fargo filed a PMI claim and sold my mortgage I’m in the process of trying to get loan modification with new lender but they are including the money wells fargo filed a PMI claim on, Is this legal? I look at it as a double dip is there some law on this issue.

        • Gerri Detweiler

          Good question. I am not exactly sure of the answer. We wrote about PMI problems here: Mortgage Insurance Shocker: Collections After Default You may want to reach out to a real estate attorney familiar with this issue or the Consumer Financial Protection Bureau.

      • banks

        I have a home that may go into foreclosure in the event of my death. I own another home free of a lien. Both in the state of Missouri, but different counties. Will the Mortgage company attach a lien to the other?

        • Gerri Detweiler

          That’s a question for a consumer law or estate planning attorney in your state. It’s possible the lender on the loan that defaults could go after the assets of the estate, which may include the home owned free and clear. Planning for that type of situation is important if you want to leave the free and clear home to your heirs.

      • CAROL

        oh well, thanks, never seems to be any.

        • Gerri Detweiler

          As much as we’d like to help, Carol, this is a legal matter that requires legal assistance. Have you tried contacting the attorney who filed your bankruptcy for help?

          • Guest

            They moved out of state in 2003. I have no one. This town is sewn up TIGHT. I’m up against a LOT of people

            • Gerri Detweiler

              I’m sorry Carol. I am not an attorney and not qualified to assist you with this unfortunately.

      • Gerri Detweiler

        It depends on exactly what is reported, but it usually runs from the date the public record item was filed with the court. Have you tried asking the credit reporting agency when the particular item on your report will be removed? Will you let us know what they say?

      • Gerri Detweiler

        I’m afraid I simply don’t know. Do you have a copy of the paperwork that you signed when you financed it? If not, my best suggestion is for you to contact your state consumer protection agency to find out if there are laws in your state the protect consumers in this kind of situation.

      • Gerri Detweiler

        Joe – It certainly does sounds unfair and against the spirit of the FCRA which generally gives consumers a fresh start after 7 years. But part of the problem is that the law doesn’t spell out every single scenario. In fact, foreclosure isn’t even mentioned. As a result, it presumably defaults to the seven year period and the 7 year period (for the foreclosure) would commence when the foreclosure took place. I haven’t been able to find anything to the contrary but that doesn’t mean it doesn’t exist. I did find one FTC Staff Commentary letter referenced (can’t find the letter itself) which says that in the case of a collection account it begins the date it was placed for collection or charged off – whichever occurs first.

      • Gerri Detweiler

        That sounds positive. The only thing I would caution you is that’s his interpretation and the credit reporting agencies maintain their own systems that determine when information can no longer be reported. It could vary from bureau to bureau. So you’ll need to keep a close eye on this and dispute it if you think it’s being reported too long. If one of the agencies refuses to stop reporting it you may need to contact the CFPB or get a consumer law attorney involved.

        • Joe Glickman

          I checked with the three agencies – Equifax and TransUnion are both providing me in writing that the delinquent account will fall off in January of 2016, regardless of whether the foreclosure goes through. They are measuring the 7 years from the first date of delinquency – January 2009. Experian, on the other hand, told me it won’t fall of until 2022, which I’ve already appealed.

          • Gerri Detweiler

            Very good to know Joe. Please do keep us posted.

      • TalethaDorsett Clincy

        As of yesterday March 23, 2015, the rental property my friend is living in was purchased at a foreclosure. Does she have any legal recourse? Also the landlord claims they are going to object to the foreclosure. In addition, is she legally obligated to continue paying rent

      • CA

        i have a question. My home and property has been foreclosed by the bank . How long can I reside on the the property after it has been sold at auction by the bank ?? I reside in MD

        • Gerri Detweiler

          You’ll find a helpful Maryland foreclosure timeline here. Anytime someone goes through foreclosure I recommend they talk with a consumer bankruptcy attorney to make sure that a. they can’t be sued for a deficiency and b. they won’t owe taxes on the cancelled debt. These issues are both very important. You’ve been through enough: finding out in a couple of years that you are being taken to court or get a tax bill will only make it worse.

          Hope things turn around for you soon.

      • Gerri Detweiler

        I truly don’t know – I’d suggest you talk with a loan officer to find out what your options are.

      • Gerri Detweiler

        I wish I could give you a simple answer but this is a problem that’s happening nationwide, where the banks that successfully bid on the property don’t record the deed right away. However, the procedure to force them to do so varies by municipality. You’re going to need to talk with a real estate attorney in your area who can help. You may also be eligible for help from Legal Aid if you can’t afford an attorney.

      • Gerri Detweiler

        As far as I know it won’t directly affect it. But I am not a consumer law attorney so please don’t take that as legal advice. Typically, when a home goes into foreclosure if there is a deficiency the lender will try to collect from whatever assets they are legally able to pursue. If would not be a bad idea to talk with a consumer bankruptcy attorney to find out what they can and cannot do to collect from you.

      • Don

        if the house is in escrow and the Boehner did not get paid for the timely payments in the meantime in escrow she can foreclose and when they foreclosed can the escrow still go through providing she still gets her back payments and all the money owed to the house

        • Gerri Detweiler

          I am sorry I don’t understand what you are asking.

      • Gerri Detweiler

        I don’t know what log the property means…sorry?

      • Ralf Evans

        Need some advice. My wife and I got behind in our mortage in 2009 and we ended up filing BK 13.
        We signed a Deed in Leau at the foreclosure.
        We have been in the house for 7 years and just received a foreclosure notice.
        We have had many offers form the bank to sign a new agreement but we have not.
        I am not on the note but on the mortgage. My wife is on both.
        My question is, am I liable for any type of repayment if we get sued by the bank by not being on the note, filing BK including the house at that time and having the Deed in Leau?


        • Gerri Detweiler

          Did you file your bankruptcy with the help of an attorney? If so that’s the person to ask about this question. If you didn’t use an attorney I would suspect you’re not liable since you weren’t on the note to begin with but it’s really a legal question that is best answered by an attorney.

      • andya

        My son and wife are trying to close on a house that bought that was foreclosed. Their bid was accepted by the bank but the bank has put off closing due to issue with an heir. They cannot get any info on what is going on. This seems like a horse after the cart issue. Comments

      • karen rotko

        My house was foreclosed on in April, the bank bought the property. Many people have told me I will be able to get an extension to live in the house until I find a place to rent. Do you know if this is true and if yes how do I go about getting an extension in the home

        • Gerri Detweiler

          I don’t know whether that is the case but I would encourage you to either talk with a consumer bankruptcy attorney who should be able to explain your rights after foreclosure and/or a housing counselor which you can find via It’s not a bad idea for you to talk with the attorney to make sure you can’t be held responsible for a deficiency or additional costs until you are cleared from the title.

      • 1DMarie

        This seems like a very old article & not up to date at all with all the latest programs available to ppl that I’ve heard so much about. What about the HARP program, etc?

        • Gerri Detweiler

          Foreclosure laws themselves haven’t changed much in the past few years in most states (and this article is designed to provide an overview at any rate). You’re right in pointing there are various relief programs that may be available to homeowners. We’ve written articles about them on the blog. You can visit and use the search engine there to find other articles that may be helpful.

      • Bob Buntin

        My 1/2 brother and I are on the deed to my Mother’s home. She had a small Heloc and at 92 entered a nursing home. The past 10 years my wife and I took care of her and live in the home. We assumed all costs and maintenance of the home however we were unaware of the Heloc. The bank initiated foreclosure proceedings I am the only party that answered. Time extensions have been granted and the motion for Summary Judgment has not yet been ruled on. My Mother passed on March 4 this year. Several Questions:
        1. Is foreclosure still valid?
        2. Do I now have standing?
        3. Can I force Plaintiff to start again?
        4. Do you have any suggestions, we wish to remain in the home?

        Thank You

        • Gerri Detweiler

          Bob – Our condolences for your loss. As far as your questions, though, we aren’t attorneys and can’t offer legal advice. We’ll have to recommend you talk with an attorney locally as soon as possible.

      • Jennifer

        I have requested a reinstatement quote from my mortgage company (Chase) and their attorney multiple times. They keep saying it will be sent in a certain time frame, and the time frame has come and gone multiple times and they never send anything. Do I have any recourse? My home will be sold in a few weeks if I do not find out where to send the money and how much exactly.

        • Credit Experts

          It sounds as if you need to see a lawyer. In many cases, a short consultation is free.

      • Scott Noyes

        House was foreclosed on and we went to court for the eviction notice and the bank did not show. Case was dismissed. What happens now?

        • Gerri Detweiler

          Was it dismissed with or without prejudice? If it was dismissed without prejudice they may be able to refile. If it was dismissed with prejudice they may be able to refile depending on state law. You may want to consult a real estate or consumer law attorney to find out for certain how the foreclosure process works in your state.

      • JC

        Hi: Here is a brain teaser: Mortgage loan was assigned to WaMu. As you know, WaMu failed and was taken over by FDIC. Then FDIC sold WaMu’s Mortgage loans for pennies on the dollar to JP Morgan Chase. The mortgage is in foreclosure, There are no records that disclose JP Morgan Chase acquired or purchased any particular mortgage loan(s) from WaMu. Yet Chase is trying to foreclosure. If Chase is the injured party in this case, What is the amount of the injury? My limited educational guess would be only the amount that Chase paid FDIC — pennies on the dollar. What is your opinion?
        Thank you.

      • betty W

        I had a second mortgage line of credit on my home. My house went into foreclosure and 2 years later the lender got a judgment on me. Is that legal?

        • Gerri Detweiler

          Often lenders can sue to collect a deficiency after a foreclosure, and in many states they have 4-6 years to do so. Whether your specific case was handled legally isn’t something we can comment on, however, since that would depend on state law as well as the facts and circumstances. We would recommend you meet with a consumer bankruptcy attorney who should be able to answer your questions as well as discuss your options if you can’t afford to pay the judgment. This article may be helpful: I Found a Judgment on My Credit Report. Now What?

      • Gerri Detweiler

        I’d love to be able to help but this really requires input from a consumer law attorney in your state. You should be able to get a consultation just to find out whether the attorney thinks you have a case against the lender, and if you do, what would be involved to move forward.

      • Betty Bratton

        My uncle gave me a house 5years ago andi have livedin it the entire time,but it wasnt put inmy name before he died last the bank is auctioning it .what do i do

        • Gerri Detweiler

          Betty – What do you mean he gave it to you? Did he leave it to you in his will? Are you his heir? Have the payments been made since he died? It sounds to me like you need to at least consult with a consumer law attorney to find out what your rights are. If you can’t afford to hire one, you may be eligible for help from Legal Aid.

      • Margaret Jackson

        We are current on our first mortgage, but got behind on our HELOC. April 2014, the bank amended the heloc to a fixed payment for five years of $491. We paid $500 for several months, but then could not make the full payment so we paid $400 for several months and then $300. (We also called the bank several times to ask for help and to keep them informed of our situation.) I just paid $500 for June, and called the bank a few days ago to make an additional payment of $2200 which was the amount they said we owed for past insufficient monthly payments and fees. However, when I called they said they had just charged off the whole amount because we were three days late!!

        How can they do this without notifying me? She said they had sent certified letters back in February. When I asked her where they had been sent, she gave me an address at which we have not lived in two years (my husband works at a boarding school which is also where we live, and we rent out our house). Yet, the statements have been coming to the correct address (I did have to rectify that just last year as they still used the previous address).

        Can they charge off even though we have been sending some money every month? What happens to the $500 I just sent since they have charged it off? Can they foreclose? Our house is under contract to sell to our tenants and we have a lot of equity — do we have any options?

        Thanks so much for your help.

        • Credit Experts

          Margaret —
          We are not lawyers, and it sounds as if you need some legal advice, and quickly. Good luck sorting this out soon.

      • Nancy Doherty

        Hi, I’m also having a credit report issue, but would like to know if a lender can start a foreclosure if you are already in the middle of a loan modification?

      • Hsin Huang

        I was with New American Funding, No matter how many times I upload, fax, and send the current valid HOA insurance to them, so as the HOA management and insurance agent send them. they always said didn’t receive it and going to charge me 31,000.00 per year for the whole complex HOA insurance. So I am really tire of deal with that as home owner, too much trouble, is there a network they can just go check themself, instead endlessly harrase and threaten Condo owner, Now I list my condo, and never will want to be a owner again.

      • albert

        I live in texas where my 66 year old mother in law is currently losing her house due to a mortgage loan. The main name holder on the mortgage was my father in law who passed away more than 10 years ago but since her name was aslo included as spouse she was left with the debt. The contract on the mortgage expired in 2013 and is not under contract with them anymore but since she couldnt keep up with the payments in the past she had no other option but to refinance when she was under contract to keep payments current . (No money in return just to stay to stay current.) She is not under contract anymore but the refinance charges are still a remaining balance with them. These past years since the contract finished they have put tremendous pressure on her to forclose or quick sale due to the fact she is not paying on time again and now they are threatening to foreclose. My question is will bankruptcy help her or it wont matter.

        • Gerri Detweiler

          Please encourage her to at least talk with a bankruptcy attorney. The consultation will be free and the attorney can help her understand her options.

      • John

        I am being foreclosed on, but I had it sold before the foreclosure date. Enough to pay off the debt. The owners came in & cut trees down & destroyed most of the yard, now the buyers do not want the property anymore! What are my rights? can they come on the property without my consent & do such damage that now I can’t sell.?

        • Gerri Detweiler

          John, I wish I could help you but I am going to have to recommend you consult a real estate attorney.

      • Jane

        I cannot seem to get AN ANSWER for just one question I have???? I filed chapter 7 2 yrs. ago. I t has been discharged. Here it is now, 2 yrs. later and I am 3 payments behind so my home is going to be foreclosed.
        My question is……..why is it, that when I recieve letters from my mortgage company or I call them, I am immediately told…..that they are NOT TRYING TO COLLECT A DEBT, but are just informing me. Why is it, that I am told I am not liable for any debts for my home, and when everything is over, they will never come after us for any money????? WHY IS THAT????? CAN ANYBODY PLEASE ANSWER???? tHANK YOU SOOOOO MUCH!!!

        • Credit Experts

          We asked bankruptcy attorney Cathy Moran, and here’s what she had to say:
          “A discharge in bankruptcy eliminates your personal liability for debts that are dischargeable; the discharge does not alter the liability of your property for liens that existed on the day you filed bankruptcy.

          “A mortgage loan is usually a debt for which you have personal liability, meaning the lender could sue you and get a money judgment, AND the lender has a lien on your property.

          “It sounds like this lender is trying to acknowledge that it understands that it can’t sue you for a money judgment, but it CAN enforce its lien on your home by foreclosure.

          “You could consult with a bankruptcy lawyer about the possibility of filing a Chapter 13 case to catch up on the mortgage.”

      • John Doe

        My current Mortgage Company has filed to foreclose on our property. We are in the process of doing a Short Sale, not sure which will happen 1st. Bank has dragged their feet on everything, it’s been just over a year back and forth with this Short Sale with this bank. I just found out that they (my current Mortgage Company) never filed a letter of settlement (Payoff) with the County when we refinanced with them 9 years ago. Basically, the County Courthouse shows that there is still an original outstanding loan amount out with the 1st Mortgage Company and also theirs. Am I correct in beleiving that my Attorney can Motion to dismiss the Foreclosure due to improper filing of paperwork or, there it be, the lack of? I know it won’t stop it, but am I correct that he Bank would have to refile everything correctly now to begin the process ALL OVER again? It would buy me more time (?Months?) with the Short Sale………. Please Advise? Thank you!!!

        • Gerri Detweiler

          John, as much as I would like to help this is a question for your attorney.

      • Pat1959

        BOA denied my mod back in 2009. Said I didn’t make enough, so they increased mortgage to $1021, from $980. They stopped short sale claiming they didnt get paperwork in time. So I stopped paying and the accelerated interest, now mortg is $1200. Stopped paying in 2010, they still haven’t foreclosed. Won’t do deed in lieu unless I again try for loan mod, then short sale again. A referee was assigned on Feb 2014, I found this out calling clerks office. I moved out in 2011. Geez, enough already. The house is in Arkville, ny

      • Ant

        How do u find out how much time u have before the bank foreclosure takse affect and and the notice is put on the door? Is there a website maybe? Or hopfully someone knows

        • Gerri Detweiler

 and RealtyTrac both offer information about state foreclosure laws. But my suggestion is that you get a free consultation with a consumer bankruptcy attorney in your area. They will be familiar with foreclosure laws and, more importantly, help you figure out what your options are and how to help protect yourself from debt collection after the foreclosure.

      • Brent

        I live in WA. State, 6 1/2 yrs ago I went through bankruptcy and the mortgage debt was discharged, since then I’ve continued to live in and pay the mortgage on the house. My question is, what happens to my credit if I turned my house over to the mortgage company?

        • Gerri Detweiler

          Your mortgage may not be reporting at this point. Have you checked? Why Isn’t My Mortgage on My Credit Report?

          • Brent

            So what are the consequences of handing the house back over to the Mortgage Company after the debt has been discharged under chapter 7 of Bankruptcy court?

          • Brent

            Gerri, I am confused, 🙁 you responded to my question, however you used Omar’s mortgage being discharged and not being reported in his credit report even though he’s making mortgage payments. I too have had my mortgage debt discharged under chapter 7, and yrs later my credit score is back up in the 700’s. My question is how would turning my house over to the Mortgage company affect my credit rating and what other consequences could there be? Thank you , Brent

            • Gerri Detweiler

              I will research that for you. However, one question I have is whether the mortgage that you discharged is being reported now. Stay tuned for an update.

              • Brent

                G’mornin’ Gerri, thanks for geqtting back to me 🙂 In answer to your question, yes my discharged mortgage IS still being reported.


              • Gerri Detweiler

                Ok. Working on the other part of your question.

              • Brent

                Gerri, I was mislead by my mortgage company (big surprise) I talked with them prior to answering your question of whether my mortgage was being reported, was told YES, so I conveyed that to you. Just to make sure I went online and brought up my credit reports from the 3 major credit agencies, NONE of which showed my current mortgage holder reporting to the credit agencies. I then called them back, I relayed that the credit reports were NOT reflecting the reporting to the credit agencies, I was then transferred to another dept where I was told they DO NOT report to the credit agencies for 7 yrs after bankruptcy was granted, so in my case IF they told the truth, they will start reporting Feb of 2016.
                I did confirm the mortgage was still showing as discharged and that there hadn’t been any reformation of the mortgage debt, sorry for misleading you, I should of went straight to the credit reports rather than asking the mortgage holder.


              • Gerri Detweiler

                No problem. I assumed that was the case. We wrote about that here. Why Isn’t My Mortgage on My Credit Report? What I am trying to determine is whether the foreclosure will appear and whether that may affect your credit. Again, still researching.

              • Brent

                G’morning Gerri, again thank you for getting back to me, it’s greatly appreciated. Even though I don’t know if it makes a difference, I thought I should add this, I am NOT in any danger of a foreclosure. My handing the house back over to the mortgage co would be strictly voluntary. The reason I’m pondering doing so is the housing market where I live is still pretty depressed, houses sit on the market 6 months to a year and if I do sell chances are it would end up being a short sale. Again, I don’t know if this info makes any difference but for transparency I thought I’d include the info.
                Thank you again,

              • Gerri Detweiler

                Yes that’s helpful. Thank you. .

      • fred

        what if the bank does not want the house,they said it was mine to do with it
        what i want but i still owe the balance of the mortgage?

        • Gerri Detweiler

          Fred – That’s a very tough one. Some borrowers get stuck in limbo for years with a house the bank won’t foreclose upon. My best advice is to find a bankruptcy attorney who can help you cut your ties to the home if possible. I wish I could be of more help and hope you are able to find someone who can.

      • ick

        I had a forecosure filed in apri 09, in 2010 settied with the bank for $100,000 of which i have since paid in full and it was flied with the court and was shown the foreclure action to be moot. yet ithe foreclosure still shows on my credit report should this be removed from my record for they still show it and I cant get a loan terry

        • Gerri Detweiler

          A foreclosure can remain on your credit reports for seven years from the date it was filed. It sounds like it will be off your reports next spring.

          • ick

            Thanks that will work perfect for me for I need to refi on another property oct 16.

        • ick

          Ihave another questio for you, transunion sent mr a creit score of 919, a loan office told that it doesn’t mean anything is this true?

          • Gerri Detweiler

            That score is likely different than the one the auto lender uses. So while it doesn’t mean “nothing,” it isn’t necessarily what will be used for your loan. (However it does sound like you have a high credit score with that model and you probably have a good score with other models as well.)

      • behruz mov

        I am in foreclosure. somehow the bank satisfied my mortgage in 2002. after that I refinanced in a form of extension and consolidation . now the mortgage holder is going to court to cancel the satisfaction in order to proceed with the f/c.
        what are my option to stop that, apparently the mortgage they have is defected

        • Gerri Detweiler

          I wish I could advise you but this really requires the assistance of an attorney. If you need help finding one you can try the website of the National Association of Consumer Advocates.

      • Yanine Vargas Salas

        Note from Due to the personal information in your question we cannot publish it, however, we recommend your relative contact a consumer law attorney right away. The bank could seek a deficiency judgment which could result in the loss of some of his personal assets. He can visit the website of the National Association of Consumer Advocates if he needs help locating an attorney. I know it may feel like he is throwing good money after bad, but I would really encourage him to get legal advice.

      • Bella

        My primary home went into foreclosed July or Aug of 2015. It was just bought July 01,2015. Now I received a letter from a collection agency. What do I do from here.

        • Gerri Detweiler

          Bella – I am confused. You indicate you went into foreclosure July of August 2015 and the house was bought July 1, 2015…?? Maybe you meant it went into foreclosure in 2014?

          At any rate, if the home was sold by the lender for less than what you owed on it (including lawful costs associated with foreclosure) then in many states the lender can try to collect the difference – called a “deficiency” from you. If the amount they are trying to collect is more than you can afford to pay then I would really encourage you to consult a consumer bankruptcy attorney who can help you understand your options. If you need help finding one you can visit the website of the National Association of Consumer Bankruptcy Attorneys.

      • michelle

        Please help me. I live in low income housing and fell behind on payments due to the association fees rising drastically. I was paying more for that than the actual mortgage. Its been 4 years since i last paid. Its now in forclosure and has been for years. They want me to fill out a hardship packet again. The first few times they said it was denied and when i talked to them today they said when i applied years ago it was not denied. I certainly would have taken the loan modification then! Now they said freddie mack made an offer in june for me to pay 3 months on time and,after that it woukd be modufied and out of forclosure. They said i never responded. I never got that offer and now its null and void. What are my options? What can i do as a low income property. Im a single mom on welfare now after my husband left. Please help

        • Gerri Detweiler

          Have you talked with a housing counselor? It can be very difficult to navigate these problems and deal with lenders on your own. I’d suggest you start here: HUD- approved housing counselors

      • von

        Hi I have a question I’m a renter but I found out the house is in foreclosure I have been paying the landlord now I have found out that the foreclosure sale date is next month which means public auction do I pay the landlord rent next month or do I plan to move because the house will not be myy landlord anymore after the sale date

        • Gerri Detweiler

          The Protecting Tenants in Foreclosure Act gives you the right to stay on until the end of your lease, or at least 90 days if the new owner decides to live in the property themselves. Until the landlord loses the property you must continue to pay rent. (Keep records of your payments!) If you want to leave now you may be able to reach an agreement with the landlord to do so but you must get it in writing and you must get it in writing that you don’t owe any further charges if you leave.

          You may want to research
          state landlord tenant laws for more information.

      • Jan

        My home was sold on 7/24/2015 at foreclosure auction. I was notified of the sale date only days before, and that was after I discovered the law firm originally handling the matter handed it off to another firm. I was never contacted in any way by the new firm. I dug around to find them and when I called they said “oops, sorry”.
        Today I found the new owner wandering around outside my house, and even entered the basement from the outside. They now have contacted me and want access to my home to take photos. Can they entenr my house before my 20 days are up?

        • Gerri Detweiler

          Jan – I am sorry I can’t be of more help but I am not familiar with the specifics in all fifty states. The attorney that took over your case should be able to answer your questions, and if you feel you were misrepresented in your foreclosure defense you may want to contact the Consumer Financial Protection Bureau and/or your state bar.

      • Gerri Detweiler

        I would recommend you help your friend file a complaint with the Consumer Financial Protection Bureau. They have some very specific rules about mortgage servicing requirements that help to protect borrowers. You can learn more here: CFPB mortgage servicing requirements

        • mk

          I had seen that listed in some of the other replies and forwarded the information to her. Hopefully that will help. Would it also be of benefit to contact the attorney general’s office in our state?

          • Gerri Detweiler

            You certainly can try. Some state AG’s have very helpful consumer protection offices. If she qualifies, another good resource could be Legal Aid.

      • trav

        I have a question I had a house that was foreclosed on in 2011. I went into default in 2010 after lossing my job to a massive layoff in sept 2009. I had a travel trailer that was on my property is I found a job out of state after I got a notice of forclosure, I moved everything but my camper (travel trailer) be for the house went on the market with a bank real estate agent the camper was removed from the property. Is there anything I can do to get the camper back or legally?

        • Gerri Detweiler

          If you left the travel trailer and the house was foreclosed upon, it’s possible that you forfeited the personal property left there. However, procedures vary by state so you’ll need to research state foreclosure laws to understand your rights. Unfortunately I don’t know of a single source that provides the information you are looking for in all fifty states.

          • trav

            where would I start It happened in MN?

            • Gerri Detweiler

              Your state attorney general’s office may be able to answer questions, You could try a HUD- approved housing counselor in your state, or talk with an attorney who handles foreclosures.

      • Tish

        Me and my husband filed chapter 13 and have a court date. Now our mortgage holder B of A has got a lawyer and sent us a letter. What do we need to do?

        • Gerri Detweiler

          I assume you have an attorney representing you in your Chapter 13? You’ll want to consult your attorney for advice.

      • shay

        My mother is deceased and the mortgage was being paid since 2007. We have ran into some hard times and the house began to go into forclosure. We could not get the funds together so I sent in her death certificate and the probate papers. I recently recieved letters of and auction and now uncertified letter in my mail that’s stating I have to pay rent. The auction was 8/4/15 & someone is asking for rent or be put out to leave with a piece of paper by 8/10/15. The mortgage company wont talk to me until my probate docs are reviewed. Can this leagally take place?

        • ScottSheldonCaliforniaLender

          The best thing you can do for yourself is to contact a real estate attorney who can legally tell you your options.

      • Ann

        I have a question about foreclosure. I purchased a home in Kentucky 10 years ago. I am the only person on the loan. However, my husband had to sign the mortgage since KY is a dower state. He immediately signed a quit claim to relinquish his rights (same day as closing) which was filed with the county clerks office. The home is now being foreclosed upon. I just received court documents about foreclosure filing and he is listed as a dependent along with 2nd mortgage even though he is no longer on property. Will this impact his credit or show up under his name?

      • Lee LaCorte

        I have a foreclosure action filed in Oct 2013. However a previous action on the same mortgage was not dismissed until Mar 2014. Is the Oct 2013 suit valid?

        • Michael Bovee

          Contact the court clerk and ask what the status of that case is.

          • Lee LaCorte

            The 2013 case is the active case now. Would that be a valid case if the case before that was not dismissed until 2014? Can 2 identical cases run simultaneously or would the later case have to be dismissed until there is an action on the earlier one.?

            • Michael Bovee

              Your best resource will be your own attorney that can help evaluate your current case (that appears to be open and active).

              If the one case is closed there is not two currently running. If there are issues with either case you will want to connect with an experience foreclosure attorney.

              Are you living in the home?

              • Lee LaCorte

                Yes I am. There are multiple issues with this case. The main one is that there is a cloud on the title. I inherited the property with my brother in 2003. The property was transferred to me without my knowing that my brother never released his ownership. The estate is still open and it wasn’t until 2009 ( and 2 mortgages and 2 equity lines later) that we were notified of the problem which was never picked up in title searches. I also was never served with the request for judicial intervention nor was the same foreclosure conference initiated in 60 days which is NY law. This is the 4th action since 2010 and if we can get the motion dismissed for any reason is past the SOL.

      • Jimmy

        Hi Gerri, I just found this forum. Lots of useful info ! I am in foreclosure ,and my Mortgage servicer, (Nationstar) appears to have taken over my title/deed. I was granted a modification through my original lender( Suntrust) and met all the requirements. I paid the new payment terms on time, but Suntrust sold my mortgage during my trial to Nationstar. I received my last check and a letter from Nationstar stating they do not intend honoingr the modification . I have received 2 checks from Suntrust since then. 1 in 2012 for an enforcement action related to deficient mortgage servicing and foreclosure process. And 1 this past July for being wrongfully denied HAMP. So many people tell me different things about what i can/should do. Examples: File BK, Go for “Quite Title”, etc…. Attorney’s are expensive and all have different views. I can not continue to pay $2000- $4000 in retainers to hit a dead end.I’ve used the money awarded to me for a few attorneys with little to no results. Looks to me they just line their pockets or have no experience if what I need done. What specific type of attorney should I use? I heard of Robo signing and forgery of documents, which may have happened to me. I heard 70% of loans from 2000 to 2009 may have been involved in this? I am a single dad, just wanting to know my rights. Can you offer any advice before its to late, if not already? Thank you so much.

        • Gerri Detweiler

          What state are you in?

      • mike G

        Joe. I have the exact same problem. Last payment made (due to a messy divorce) was made in 2009. Bank still hasnt forclosed and pings my credit every month. I am at witts end and your conversation here is the ONLY ray of hope ive had since 2009. Can you give me an update in terms of where you are at? Should I contact the credit agencies to see if like your case would apply to mine? Should I contact the FTC or do you think getting a hold of the credit agencies is my best bet to assure it will be removed??? please help THANK YOU

      • Tina

        My mortgage company foreclosed on my property in Sept 2009, as of today have still not finished the process, but continue to post past due payment notices on my credit report. How can I stop this ? It is keeping me from starting a business in which to support my family.

        • Gerri Detweiler

          I am not aware of any specific federal law that would prohibit this. But you can certainly talk with a consumer protection attorney or at least try filing a complaint with the CFPB.

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