Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (normally a house) that secured the loan. This is done when the Shenandoah, Iowa debtor has repeatedly failed to make their payments. When a house is foreclosed, it is normally sold at auction shortly thereafter. This is because banks normally want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an simple 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 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 some states, original mortgages are treated as "non-recourse" loans, meaning that, at most, the lender can take possession of the house in the event of foreclosure, even if it is worth less than the amount due. The bank cannot go after the borrower for the remaining balance once it sells the house. You should consult an attorney in Shenandoah, Iowa to find out if this is the case here. This normally does not apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Iowa?
Most importantly, you must not dismiss the problem. Doing so will not make it go away, and will probably make it worse. You should stay in close contact with your bank, and be straightforward with them. It is essential to remember that the bank does not really want your Shenandoah house - they expected to make a profit through the interest on your loan, and that's what they'd prefer to do. Accordingly, they will probably make reasonable accommodations to your financial situation if it means that you will be able to make some form of payment to them.
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 Shenandoah, Iowa Attorney Help?
If you are worried about foreclosure, a good Shenandoah, Iowa real estate attorney may be able to help. An attorney can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.