Mortgages are large loans. They frequently involve 30-year repayment schedules and six figures or more of initial funding provided by the lender. To minimize the risk involved, mortgage lenders record the loan with the county so that they can treat the property as collateral in the event of a default. Foreclosure is the process through which lenders reclaim real property when buyers default on their mortgages.
A single missed payment is generally not enough to trigger foreclosure. How quickly are homeowners at risk of losing their houses if they miss payments?
Multiple missed payments are necessary
Mortgages are subject to strict federal regulations. There are many standards in place to protect people from unfair foreclosure. Lenders generally need to provide borrowers with an opportunity to redeem their mortgages and to catch up on missed payments.
Usually, foreclosure only becomes a concern once an individual has missed four or more back-to-back payments. At that point, they may need to produce thousands of dollars to bring the mortgage back into good standing. If they cannot do so, then they are vulnerable to foreclosure in the immediate future.
Thankfully, they also have the opportunity to respond and protect their real estate. A bankruptcy filing pursued before the completion of foreclosure can protect people from the loss of their homes and the equity that they have accrued in the property.
Discussing personal bankruptcy with a legal professional before a mortgage lender initiates foreclosure proceedings can be helpful, as can filing for bankruptcy immediately after the initiation of foreclosure proceedings. Those at risk of losing valuable assets may need to act assertively before their situation worsens.
