Foreclosure Myths

Myth: My mortgage company wants to foreclose on me.
Reality: Mortgage companies sustain losses when they foreclose on a home. In many cases they would rather keep you in your home than foreclose on you.

Myth: Once foreclosure proceedings begin there is nothing more that can be done to save my home from foreclosure.
Reality: There are almost always options available to a homeowner, even during the foreclosure process. Getting help sooner is always better than later but it is almost never too late to do something.

Myth: I am too far behind on my mortgage payments to get help.
Reality: This may not be true. Depending on your financial situation your mortgage company may be willing to work with you to keep you in your home.

Myth: The foreclosure sale date has been set; there is nothing more I can do.
Reality: Some lenders are still willing to work out a plan to keep you in your home. Bankruptcy may also help keep you in your home if a sale date has already been set.

Myth: Once the house has been sold at the foreclosure sale I have to move out immediately.
Reality: The amount of time you have to move out varies depending on what state your home is located in. You could have only a few days up to several months, consult a local attorney to determine your state’s laws.

Myth: When the mortgage company sells my home at the foreclosure sale I can walk away free and clear.
Reality: That may not be true if your home sells for less than you owe on the mortgage. If the home sells for less than the amount you owe the difference is called a deficiency. You may still be required to pay the deficiency, with interest, in some circumstances.

Myth: When the mortgage company forecloses on my home they get to keep everything in it.
Reality: The mortgage company cannot take your personal property. However, you will have to leave permanent fixtures like lights, toilets, sinks, and other fixtures that are attached to the home.

Myth: Foreclosure is a rare occurrence.
Reality: Many people face foreclosure every day of the year. Foreclosure is common and effects people from all walks of life. Many of these same people are able to prevent foreclosure by negotiating with their mortgage company. Don’t let embarrassment keep you from seeking help in preventing foreclosure.

Myth: If I am negotiating with my mortgage company they won’t sell my home.
Reality: Mortgage companies sometimes sell houses while in negotiation with the homeowners. In most cases your mortgage company will not cancel a scheduled sale, even if you are currently negotiating with them. In order to cancel the scheduled sale, the mortgage company usually requires the homeowner to return a signed repayment or modification offer prior to the sale date. Postponement of the sale can also occur in some instances; however, the mortgage company will usually wait until the day before the sale to make their decision.