If you have the question, “I got a foreclosure notice, what do I do?” and don’t know where to turn, this article can help and you are definitely not alone. What if you just missed a payment and are not sure what is going to happen next? This will help with that too.
“The Baton Rouge metro area saw a 43% uptick in foreclosure starts last year, the largest spike recorded among the nation’s largest metro areas.” – Businessreport.com
If you are one of these people, you are in the right place. First, I will summarize the process. Then, I will tell you possible ways to stop it.
How long after my first missed payment will I be foreclosed upon?
Federal law requires lenders to wait until you are 120 or more days late. This time is for you to look into the possible solutions I mention at the bottom of the article. But to give you a sample, you can renegotiate your loan, sell the house, or file bankruptcy among other options.
Ok, I am past 120 days late, now what?
First, we will dive into the technical bit. The first thing you need to know about foreclosures in Baton Rouge is there are two types, and they both involve going to court. The types are as follows:
- Ordinary – It is like a lawsuit. Expensive and lasts around 9 months.
- Executory – This is more common. If your mortgage has a “confession of judgement”, you agree to the judgement against you automatically when you signed your mortgage contract. This is usually a 6 month process and is smoother. There are two options to stop the process. You can appeal the foreclosure or bring a lawsuit asking the court to halt the foreclosure process.
Upon default, the mortgage company files a foreclosure petition in court. The court orders the property to be seized and auctioned.
Next, you will personally be served with a notice of seizure by the sheriff. This notice will include your options to avoid foreclosure as well as the date, time, and location of the sheriff sale. This is your chance to appeal or bring a lawsuit to stop the process. The date of the sale can not be closer than 60 days from the time the court signed the foreclosure order (La. Rev. Stat. § 13:3852, La. Code Civ. Proc. Ann. art. 2293(B)(1)).
3 or more days from the notice of seizure, the notice of sale will be published two times in the newspaper in the parish your property is located.
The Sheriff conducts the sale, and anyone can bid. The winning bid must pay cash for the property, then will receive the deed. If you are still in the house, the sheriff can remove you at this point.
Yikes, ok, we definitely don’t want to get to that point. If you got a foreclosure notice from the sheriff, you basically have three options. You can fight it in court, sell fast and pay off the loan and foreclosure expenses, or file bankruptcy. However, if you are in pre-foreclosure (missed payment less than 120 days late), there are many more options. You want to start looking at options as soon as you know you are going to miss payments before you get the foreclosure notice!
How Can I Stop the Pre-Foreclosure Process???
- You can negotiate with your lender (recommended first action)
- You can sell your house while you are in pre foreclosure quickly for cash (this is the service I offer, but it will not make sense in all situations)
- You can file for bankruptcy, which will allow you to stay in your house for a short period – This one you can do after you got a foreclosure notice
- Forbearance – this goes with negotiating with lender. This is a pause or reduced payment for an agreed upon period of time until you can pick up your regular payments. It adds the missed payments to the end of the loan.
- Loan modification – altering the terms of your loan so you can afford to make payments (for example, extending a 15 year to a 30 year to decrease the payments)
- Short sale – If you are underwater, the lender may agree to sell your home for less than you owe.
- Reverse Mortgage – If you are 62 or older and have equity in your home, you can pull equity out, and it basically will increase your loan balance and decrease your equity. This is a little more complicated, and you would need to stay in the home and continue maintaining it.
- Check out our free guide for more info about this
Other Terms you May Hear
What is Right to Reinstate?
Right to reinstate is stopping a foreclosure by making your missed payments and fees before a sale. Many states have this, Louisiana law does not. However, your mortgage terms may allow it, or the lender may let you get current. You would just have to talk to them.
What is a Deficiency Judgement?
Deficiency judgements are when the sale price of the property is less than what you owe. The lender can file a separate lawsuit to try to get the difference. This is bad. It also can change an Executory proceeding into an Ordinary proceeding. (La. Code Civ. Proc. Ann. art. 2772). The lender must have your property appraised before the sale to do one of these.
*Disclaimer – I am not an attorney and the information provided on this site is not legal advice, it is meant to educate you. Please consult an attorney as soon as you’ve been served with foreclosure papers.
Sources – https://www.stopforeclosureshelp.com/keep-your-home-by-avoiding-foreclosure/
https://www.realtytrac.com/real-estate-guides/foreclosure-laws/louisiana-foreclosure-laws/
https://www.alllaw.com/articles/nolo/foreclosure/laws-in-louisiana.html