Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (usually a house) that secured the loan. This is done when the Kodiak, Alaska debtor has repeatedly failed to make their payments. Foreclosure usually requires the house to be sold at an auction. Usually, banks want to rid themselves of the property as soon as they can, in order to gather as much money as possible.
In all states in the United States, including Alaska, foreclosure by judicial sale is an option. This allows the sale to be done under the supervision of a court, to ensure that the bank makes a good faith effort to get a fair price, and that the proceeds above and beyond the balance of the mortgage (if there are any) go back to the debtor. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the borrower owes, the bank cannot go after the debtor for the remainder. You should consult with an lawyer in Kodiak, Alaska to see if this is the case. However, this usually doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Alaska?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be honest with them. Ignoring the issue will not make it go away. You should remember that banks in Kodiak don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are honest with them, lenders will usually try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you believe that foreclosure is imminent, there are some other avenues. For example, you may be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can receive, give the proceeds to the lender, and walk away free of your mortgage debt, even if the sale netted less than the balance of the mortgage. You may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A Kodiak, Alaska Attorney Help?
If you think foreclosure is imminent, a good Kodiak, Alaska lawyer may be your best hope for staving it off. Even if keeping the house proves impossible, a good attorney can minimize the financial effects.