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Sale of property still possible in foreclosure

On Behalf of | Jul 12, 2017 | Residential Real Estate

Delaware homeowners who are struggling to keep up with mortgage payments often have questions about foreclosure. Specifically, many homeowners wonder whether it is possible to sell a home once the process has begun. Typically, the homeowner retains the right to sell the property up until it is sold at auction. In such a situation the owner must be able to cover the outstanding amount owed to the lender, including any penalties and back payments.

The foreclosure process begins with a notice of default. Following the notice of default, the home is in pre-foreclosure. During this time, the homeowner may be able to negotiate a settlement with the lender or arrange to sell the home and pay off the debt. This strategy protects the homeowner’s credit from further damage, but requires disposition of the home.

In many states, homeowners have a right of redemption, which allows for the repurchase of the home for a period following foreclosure. Because lenders incur significant costs when foreclosing on a property, many are willing to discuss the possibility of a short sale, wherein the property is sold for less than the amount owed, with the remainder of the debt reduced or forgiven.

For most homeowners, an open line of communication with lenders can save time and effort. Those who are struggling to make mortgage payments may want to meet with an attorney with experience handling real estate matters who may be able to help by examining the facts of the case and suggesting avenues of relief. An attorney may be able to negotiate settlement with lenders or draft and file legal documents to delay foreclosure. Loan restructuring or short selling may help individuals keep their homes or walk away from residential real estate without significant debt.