Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (typically a house) that secured the loan. This is done when the Sergeant Bluff, Iowa debtor has repeatedly failed to make their payments. When a house is foreclosed, it is typically sold at auction shortly thereafter. This is because banks typically want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy way to do this.
In all states in the United States, including Iowa, foreclosure by judicial sale is an option. This allows the sale to be conducted 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 some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take ownership of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the debtor for the remaining balance once it sells the house. You should consult a Lawyer in Sergeant Bluff, Iowa to find out if this is the case here. This typically does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Iowa?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. You should remember that banks in Sergeant Bluff 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 forthright with them, lenders will typically 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 options. For example, you might be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can get, 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 might 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 Sergeant Bluff, Iowa Attorney Help?
If you are faced with the possibility of foreclosure in Sergeant Bluff, Iowa, an Attorney might be able to help. At the very least, he or she can advise you of your legal options.