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 Westerly, 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 Westerly, 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 important to remember that banks don't really want to own homes in Westerly. 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 enable you to keep paying them in the long run.
If no deal can be worked out, or the mortgage payments have become prohibitive, you might consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders usually treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency might be forgiven. There is also the option of a "short refinance," which forgives a substantial portion of your mortgage debt, and refinances the rest.
How Can A Westerly, Rhode Island Attorney Help?
If you are facing the possibility of foreclosure, a good Westerly, Rhode Island real estate Attorney can help. At the very least, they will be able to inform you of your legal options.