Foreclosure is a judicial procedure 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 Melville, New York. 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 every state, including New York, there is an option to go through foreclosure by a judicial sale, which is a process in which a court supervises the sale of the property, and makes sure that the proceeds first go the to the holder of the mortgage, then to anyone else who may have a lien on the property, and lastly to the debtor if anything is left. 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 Melville, New York 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 New York?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be straightforward with them. Ignoring the issue will not make it go away. You should remember that banks in Melville 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 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 considerable portion of your mortgage debt, and refinances the rest.
How Can A Melville, New York Attorney Help?
If you are worried about foreclosure, a good Melville, New York 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.