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 Valparaiso, 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 some states, original mortgages are "non-recourse loans," meaning that the lender may only recover ownership of the house in the event of default. If the house is now worth less than the balance of the mortgage, the lender has to take the loss. You should speak with a Valparaiso, Indiana attorney to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans that have been refinanced.
How Can I Avoid Foreclosure in Indiana?
First, and most importantly, you should not dismiss the issue. Failing to respond to foreclosure calls from your lender will not make an issue go away. You should stay in touch, and be honest with, your creditor as much as possible. It is important to remember that banks don't really want to own homes in Valparaiso. In issuing a mortgage, they expect to make a profit through interest on the loan, and they'd prefer to continue collecting from you. Therefore, they're likely to make reasonable accommodations to your financial situation if it will allow you to keep paying them in the long run.
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. There is also the option of a "short refinance," which forgives a significant portion of your mortgage debt, and refinances the rest.
How Can A Valparaiso, Indiana Attorney Help?
If you are worried about foreclosure, a good Valparaiso, 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.