You have missed several mortgage payments and are now wondering when your lender will foreclose. Homeowners unfamiliar with the foreclosure process often panic when they have missed payments. There is no need to panic, and foreclosure laws give homeowners time to save their homes.
The Nebraska Foreclosure Process
Federal law regulates home loans and foreclosure proceedings. The Nebraska foreclosure laws protect borrowers from losing their homes, so homeowners must learn about the foreclosure process and their rights according to state law.
Homeowners will face a pre-foreclosure when they begin to miss mortgage payments. This period gives the borrower time to catch up on missed payments. The mortgage servicer sends a breach letter that explains how to avoid foreclosure.
The mortgage servicer can charge late fees and inspection fees during the pre-foreclosure period. The lender wants inspections to determine that the house is being occupied and maintained.
The official foreclosure process can begin once you are more than 120 past due on your mortgage payments. The mortgage servicer must contact a Nebraska homeowner by phone within 36 days of missing a payment. They are required to continue this contact within 36 days after each consecutive missed payment.
The servicer must advise the homeowner about all loss mitigation options. They will provide the name of a housing counselor to help you decide the best choice for your financial situation.
The easiest way to avoid foreclosure is to negotiate a loan modification or forbearance. A loan modification means changing the terms and payments of your mortgage loan. Typically, your servicer will negotiate a repayment plan, and the goal is to bring your loan current.
Homeowners can work with the U.S. Department of Housing and Urban Development (HUD). They support homeowners when it comes to housing laws.
There are two types of foreclosure: judicial and nonjudicial. In Nebraska, nonjudicial foreclosure is the most common. The official foreclosure starts when the lender files the default notice with the county recorder’s office. The borrower then has one month for reinstatement, meaning they must pay the full late payments.
Nebraska’s trust deeds typically include a request for notices. The notice of default will be sent to the borrower’s address. The lender also sends a notice of sale one month later if the loan still needs to be reinstated.
Once the borrower sends the notice of sale, the lender can sell the house at a foreclosure auction. The servicer must follow each step in the foreclosure process, or the homeowner will have grounds to stop it.
Notice of Default
The notice of default is the official start of the foreclosure process. Once the homeowner receives their copy of the notice of default, they have one month to avoid the sale of the property.
At this point, a homeowner might consider chapter 13 bankruptcy. Bankruptcy might be the answer to managing your total debt and saving your home from foreclosure. Bankruptcy allows the homeowner to make a repayment plan.
Notice of Foreclosure Sale
After 30 days have passed since the notice of default has been filed, the mortgage servicer can send a notice of sale to the homeowner.
The mortgage lender must publish the notice of sale in a newspaper for five consecutive weeks before the sale can happen. The notice will detail the location and the sale date. Once a deed of trust sale is complete, you cannot reverse it.
Filing for chapter 13 bankruptcy will stop the sale. Chapter 13 bankruptcy allows borrowers to create a repayment plan for their debt. People don’t consider bankruptcy a positive thing, but it can be a way to get control of your financial situation.
If you don’t want to file for bankruptcy, selling your home is another option. You can prepare your home for sale and price it so it is attractive to buyers. You will have to sell it quickly, and the price might reflect something other than the fair market value of your home. You can also sell to cash home buyers in Nebraska.
The lender will generally make a credit bid. The foreclosure sale price may be lower than what you owe. If the lender is the highest bidder, a deficiency judgment against the borrower is possible, and the borrower must pay the difference. When the lender is the highest bidder, the real property becomes real estate owned.
If another party is the highest bidder and offers more than the borrower owes, the borrower will be entitled to any money left when all debts are paid. The borrower can leave the situation with some money to start fresh.
Nebraska does not allow the right of redemption after foreclosure, and homeowners must satisfy the lien holders before the property sale. Redemption means that the borrower must pay the total amount of the mortgage loan.
Real Estate Owned (REO)
A real-estate-owned property does not sell during the foreclosure sale, and the mortgage lender assumes ownership. The mortgage lender or bank is responsible for the property. These properties are typically listed lower than the fair market value.
When a property becomes real-estate owned, the mortgage lender might not necessarily evict the prior owners while attempting to sell the property. They become landlords until they can sell the property.
Bankers and mortgage lenders are not in the real estate business and are not interested in repairing and preparing properties for sale. They want to sell the properties as quickly as possible, and they sell these properties as they are and hope to get a fair offer.
Real estate-owned properties are an excellent investment for real estate companies. They may require repairs, but the sale price is typically attractive enough that real estate investors can flip the property for a hefty profit.
Homeowners must vacate the property when the foreclosure sale is final. If the occupant fails to leave, the new owner must go to court and ask for an eviction order. The new owner will have to follow the steps to evict the prior owner from the premises.
What To Do if Your House Is in Foreclosure
When you receive a foreclosure notice, you should act quickly. Homeowners have several options that will help them avoid foreclosure. You should have exercised all your loss mitigation options throughout the pre-foreclosure period.
It is essential to work with your mortgage lender. Avoiding telephone calls will not help, and you should continue negotiating a plan that works for everyone.
Once in the official foreclosure process, you can sell your house to pay off the mortgage. You will have to sell it quickly before the foreclosure sale date. The home’s sale price can be applied to your mortgage loan. Once you have paid your debt, the foreclosure process stops.
You can take advantage of the redemption period before the foreclosure sale and pay off the entire amount of the mortgage loan. You can borrow money from family or friends to save your home.
You can file for chapter 13 bankruptcy. Once you have filed for bankruptcy, the foreclosure process stops. You will have time to create a plan for repayment of your debts. The repayment plan can be from 3 to 5 years, and the arrears on your mortgage loan can be part of this repayment plan.
Another option is to do nothing. You can wait until the lender sells the house at the foreclosure sale. In the best-case scenario, the sale will bring enough money to pay your outstanding mortgage and fees. If not, you may be responsible for the difference. In any case, it is a way to start fresh. You will no longer be responsible for a mortgage you cannot afford.
Selling Your House While in Foreclosure in Nebraska
Financial hardship often calls for tough decisions. You may see no other alternative other than selling a house in foreclosure. If you’re lucky, you can earn enough money from the sale to settle your mortgage loan. You can consider a company that can sell a house fast in Hickman.
You can sell your home privately and avoid the high commission costs you must pay when working with a realtor. A private sale is not the wisest choice because you have a very short period to sell before the foreclosure sale date.
You should find a top realtor who knows your situation and is willing to help you sell your property. Unfortunately, selling your home on the real estate market takes time, and when you face foreclosure, you don’t have the luxury of time.
You can also accept a cash offer from a real estate company specializing in foreclosure properties. They will offer less than fair market value, but you can make the sale quickly. A quick sale might allow you to pay off your mortgage loan and have some money left to make a new start. Consider downsizing to a house you can afford.
The foreclosure process does not happen overnight. Homeowners have time to save their homes even after they receive the notice of a foreclosure sale. Borrowers should know their rights when it comes to mortgage loans and foreclosure.
Typically, mortgage servicers prefer to work with their clients to save their homes rather than foreclosing on a property they will have to sell.
Remember we buy houses Lincoln for anybody that is looking to sell their house.