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 Port Chester, New York. When a house is foreclosed, it is typically sold at auction shortly thereafter. This is because banks typically want to get rid of the property as soon as possible, even if it means losing some money, and an auction is an easy 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 procedure 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 finally to the debtor if anything is left. In some states, original mortgages are "non-recourse loans," meaning that the lender can 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 Port Chester, New York Lawyer to see if this state is one of them. However, it is almost always the case that this protection does not apply to loans which have been refinanced.
How Can I Avoid Foreclosure in New York?
First and foremost, you should not ignore the possibility of foreclosure. Failing to respond to collection calls from your lender will not make the problem go away. As unpleasant as this might seem, you should stay in contact with your creditor, and be forthright with them. One should remember that banks usually don't want to take your house in Port Chester. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are forthright with them about your financial situation, they are likely to make reasonable accommodations to prevent you from defaulting.
If you can't work things out with your lender, there are other options. You could try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still gets those proceeds, but the remainder of the loan will be forgiven. You might 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 Port Chester, New York Attorney Help?
If you are worried about foreclosure, a good Port Chester, New York real estate Lawyer might be able to help. A Lawyer can increase your chances of keeping your home, and help minimize the financial impact if keeping it proves impossible.