What Homeowners in Foreclosure Should KnowMichael Schulman
What Homeowners in Foreclosure Should Know… Part 6… My home has a foreclosure sale date, now what?
Once a foreclosure auction date has been set by the Referee, and properly published, most homeowners fear they must immediately pack their bags and move out. This is not the case.
Firstly, there are a few ways that the foreclosure auction date may be able to be cancelled or adjourned (postponed). If your financial circumstances have changed, and you believe you may be able to qualify for a loss mitigation option, you can submit a loss mitigation package for review, and if the loss mitigation department is reviewing it, the sale can be cancelled or adjourned, to give the review time to be completed. Alternatively, if you have put your home up for sale during the foreclosure process, and have found a buyer, you can attempt to have the foreclosure auction adjourned in order to give you time to complete this transaction. If you have consulted with an attorney and you believe that the best course of action at this point would be to file for bankruptcy, the sale will be cancelled when you file for bankruptcy. As discussed in previous blogs, bankruptcy rules are complicated and there are a lot of ramifications from filing, so you should consult with an attorney who specializes in this first.
Secondly, if none of these are options for you, and the foreclosure sale goes through. It will either be sold back to the servicer or bank who held the mortgage, or to some third party bidder at the foreclosure auction.
If it gets sold back to the servicer or bank who held the mortgage, certain documents, including a deed are prepared and executed by the Referee. Once the servicer or bank takes ownership through a deed, the property is then owned by the servicer or bank. If it gets sold to a third party at the foreclosure auction, a closing will be held where the third party purchases the property, and all necessary documents will be signed over to them.
If you still are residing in the property at this point, often times an attorney is retained to start a landlord tenant action against you in order to have you removed from the property. You will be served with documents allowing you time to vacate the property, and if you do not, a landlord tenant action will be commenced. Often times you can work with the attorney to give you some time to leave the property, or work out a “Cash for keys” agreement, whereby you receive money in order to vacate the property by a certain agreed upon date.
The most important thing to be taken away from this entire six part series is that if you have a foreclosure action against you, or believe one is imminent, you should consult with an attorney immediately so that you have the best chance at saving your home and preserving your rights.