Foreclosure is a judicial process in which a mortgage lender recoups some of its losses in the event of default by taking possession and/or ownership of the home that secured the loan in the first place in Newport, Rhode Island Foreclosure typically requires the house to be sold at an auction. Typically, banks want to rid themselves of the property as soon as they can, in order to collect as much money as possible.
In every state, including Rhode Island, borrowers have the option to go through foreclosure by judicial sale. This means that the auction will be overseen 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 entire balance will be covered, as well as the odds that there will be some money leftover for the borrower). In many 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 borrower for the balance, if the sale nets less than the amount due. You should consult a Lawyer in Newport, Rhode Island to learn the details of the law here. You should also know that this rarely applies to loans which have been refinanced.
How Can I Avoid Foreclosure in Rhode Island?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. It is essential to remember that the bank does not really want your Newport 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 you believe that foreclosure is imminent, there are some other options. For example, you might be able to engage in a "short sale," which sometimes allows you to sell your house for whatever amount you can get, 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. You might also try a "short refinance" which allows a piece of the debt to be forgiven, and the rest refinanced. This allows the bank to wash its hands of the matter, while taking a relatively small loss, and allows the homeowner to keep their home.
How Can A Newport, Rhode Island Attorney Help?
If you are facing the possibility of foreclosure, a good Newport, Rhode Island real estate Attorney can help. At the very least, they will be able to inform you of your legal options.