Foreclosure is the procedure through which the lender in a mortgage takes ownership and/or possession of the property that secured the original loan. This happens when a debtor in South Bend, Indiana has consistently failed to make their payments. Foreclosure usually involves a forced sale of the house at auction. Banks usually want to rid themselves of ownership of the home as soon as possible, collect as much money as they can, and then move on.
In every state, including Indiana, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be supervised by a court, to make sure that the bank makes an effort to get as high a price as possible (to increase the chances that the whole balance will be covered, as well as the odds that there will be some money leftover for the debtor). In numerous states, original mortgages (as opposed to refinanced loans) are "non-recourse" loans, meaning that the most the lender can collect is whatever the foreclosed property sells for. The bank cannot go after the debtor for the balance, if the sale nets less than the amount due. You should consult an attorney in South Bend, Indiana to learn the details of the law here. You should also know that this rarely applies to loans that have been refinanced.
How Can I Avoid Foreclosure in Indiana?
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. It is critical to remember that the bank does not really want your South Bend 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 no deal can be worked out, or the mortgage payments have become prohibitive, you may consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders generally treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency may be forgiven. You could also consider a "short refinance" which allows a part of the debt to be forgiven, and lets you refinance the rest.
How Can A South Bend, Indiana Attorney Help?
If you are worried about foreclosure, a good South Bend, Indiana 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.