Foreclosure is a legal process allowing mortgage lenders to take ownership and/or possession of the debtor's real estate (which was used to secure the loan) in the event of nonpayment in Farmington, New Mexico. Foreclosure normally results in the property being sold in an auction. Banks normally want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the easiest way to do this.
In all states in the U.S., including New Mexico, there is an option to go through foreclosure via judicial sale, in which a court oversees the sale, and makes sure that the proceeds first go to the lender, and then to any other entities that might have a lien or other interest in the property (in order of priority), and, finally, to the borrower, if anything is left. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the debtor owes, the bank cannot go after the debtor for the remainder. You should consult with an attorney in Farmington, New Mexico to see if this is the case. However, this normally doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in New Mexico?
First, you should never ignore the matter. As unpleasant as it seems, it is essential to stay on top of the issue. Ignoring the problem will never make it go away. You should remember that banks in Farmington 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 straightforward with them, lenders will normally try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't reach a solution with your lender, there are other options. You could, for example, try a "short sale," which allows you to sell your house for whatever amount you can get, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank will get the proceeds of the sale, and the rest of the debt will be forgiven. You may also consider a "short refinance" which allows a chunk of the debt to be forgiven, and lets you refinance the rest.
How Can A Farmington, New Mexico Attorney Help?
If you think foreclosure is imminent, a good Farmington, New Mexico attorney might be your best hope for staving it off. Even if keeping the house proves impossible, a good lawyer can minimize the financial effects.