Question & Answer Page for Borrowers in Foreclosure

Q. My house is in foreclosure. How do I find out how much money is required to bring the loan current?

A. The amount necessary to bring the loan current is referred to as the reinstatement amount. You may request the reinstatement amount through our office on-line, by regular mail, via the fax or over the phone. Please note that a request for a reinstatement quote typically takes 3-5 business days for the lender to process. We will forward it to you once we receive it. When you request the reinstatement amount, please specify how you would like our office to forward it to you. We can send it via fax, email or regular mail. We do not give this information over the phone. Please note, if we receive a request for reinstatement amount from someone other than the borrower (including mothers, fathers and real estate agents), we must have written authorization from the borrower to release the information to the requesting party.

Q. How do I find out the total amount necessary to pay off my loan?

A. You may request the payoff amount through our office on-line, by regular mail, via the fax or over the phone. When you make the request, please specify how you would like our office to forward the payoff quote to you. We can send it via fax, email or regular mail. We do not give this information over the phone. A typical request for payoff figures takes 3-5 business days to process.

Q. Can I sell the house and pay off the loan with the proceeds while the property is in foreclosure?

A. Yes, but keep in mind that the payoff funds must be received by our office no later than 2 days prior to the foreclosure sale. Merely having a sale pending or an interested buyer will not stop the foreclosure proceedings.

Q. How can I sell my house when the amount I owe is more than the value of the home?

A. Occasionally, lenders will agree to a "short sale" in which they accept a payoff amount less than the total amount owed. Legitimate offers that require a short sale should be sent to our office in writing so the proposal can be forwarded to the lender for its consideration. The decision to accept or reject a short sale offer is left strictly to the discretion of the lender.

Q. Will the lender allow me to make payments on the amount I am delinquent?

A. Normally, lenders will not accept partial payments of the delinquent amount. However, some lenders have loss mitigation departments that have options available for borrowers who want to cure the delinquency on their loans. Some of those options are:

• Forbearance or Workout Agreement - In this option, the lender enters into a signed agreement with all of the borrowers on the note to allow the borrowers to pay the amount of the then current delinquency in addition to the regular monthly payment, over several months, until the loan is current. A typical payment arrangement for a workout agreement is one and one-half times the regular mortgage payment until the loan is brought current and regular payments resume. However, few lenders will agree to workout agreements for a term of more than six to 12 months. So, the borrowers may be required to pay up front a part of the total delinquency as a lump sum or make payments in amounts larger than one and one-half times the regular payment. The borrowers and lender typically stipulate to put the foreclosure proceedings on hold as long as the agreed payments are received on time. If the payments agreed to in the workout agreement are not made timely, the foreclosure does not start over, but resumes from the point it was placed on hold for the workout agreement.
• Loan Modification - In this option, the lender will enter into a signed agreement with all of the borrowers to modify the obligation evidenced by the note. The modification could add the delinquencies to the balance of the note term; it could also adjust the interest rate or the payment amount.
  Borrowers are frequently required to provide the following documents for each borrower on the note to qualify for a workout agreement, payment plan or loan modification:
  • Copies of last year's tax returns
  • Copies of your last 2 paycheck stubs or verification of salary

Q. Since I did not claim the certified mail that your office sends to me, and therefore did not get the notices of the foreclosure you sent, will the foreclosure sale still take place?

A. Yes. The foreclosure process requires that notice be sent to the borrowers' address, but it does not require that the borrowers claim it. You should pick up the mail and read the information because unclaimed certified mail does not hinder the foreclosure process.

Q. I received a phone call from an individual who wants to inspect my home that is in foreclosure. Do I have to let them in?

A. Even though your house is in foreclosure, it is still your house. It is up to you whether you allow individuals who are interested in purchasing the property at a foreclosure sale to inspect the home. Your lender or the VA (if you have a VA loan) may contract to have an appraisal of your house's value in anticipation of the foreclosure sale. You are not obligated to allow the appraiser into your home. However, your refusal could result in a less accurate appraisal which, in turn, may affect whether the foreclosure fully satisfies your obligation to the lender.

Q. My house is in foreclosure and I will not be able to bring the loan current before the foreclosure sale. When should I plan on vacating the premises?

A. You and all of your belongings should be out of the house by the time of the foreclosure sale.

Q. Can I surrender my house to the lender rather than go through the foreclosure process?

A. Some lenders will consider what is referred to as a deed in lieu of foreclosure. Normally the lender will not accept a deed in lieu of foreclosure if there are any junior liens or judgments against you. If you are interested in a deed in lieu of foreclosure, contact our office.

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