What Happens if the Bank Forecloses on My Short Sale?
It happens quite often…more than you realize…that a home in process of a short sale is foreclosed on. It is a common misconception that the lender won’t file a foreclosure lawsuit against you if you are currently in the process of negotiating a short sale or loan modification.
Debbie lists her home for a short sale in November and receives a contract from a buyer. While waiting for the bank’s approval, at the end of April gets served with foreclosure papers. How can this be if she has a contract on the property?
It can be. And again, it is quite common. You should expect to get served with a foreclosure lawsuit four months or so after you stop making mortgage payments. When you try to complete a short sale, it more often than not takes a month or two to get it under contract and 45 to 90 days to get approval from the lender. If you fail to respond to the foreclosure within 20 days, you will be in default and will have waived valuable rights in defending the lawsuit in case the short sale falls through. It is recommended that you see an attorney about responding to the lawsuit.
For more information on mortgage mediation, foreclosure, short sales, bankruptcy and all things related to personal finance, check out Bellevue Bankruptcy Blog. These topics and issues can be confusing and stressful, but help is available! Contact us today!
More tips on Short Sales:
- How Short Sales Work
- What could be trashing your home’s value now?
- 3 Common Real Estate Scams to Watch For