Does Probate Delay Foreclosure
When homeowners face the reality that they may not be able to keep their home and qualify for a refinance or deed in lieu of foreclosure, a question often comes up: “Does probate delay foreclosure?” Unfortunately, many people do not understand what a probate process really is or how it affects the process of foreclosure. The truth is, it delays the sheriff sale until all debts have been paid and the homeowners have been given time to get out from under the mortgage.
Foreclosure occurs when the mortgage holder files a lawsuit against the homeowner. The suit names the homeowner as the defendant and demands that the mortgage is paid in full. In most states, the lawsuit is initiated by the mortgage company. After the lawsuit, a date for the foreclosure auction is set and the proceeds are distributed to the mortgagor and the lender.
When the date of the auction is reached and the proceeds aren’t collected, the defaulting lender files a complaint in probate court. The home is offered for sale and either the bank takes over the property themselves or the foreclosure auction is continued until all debts have been repaid. When the lender opts to take over the house through a foreclosure process, they will be responsible for selling the property on behalf of the homeowners. In most states, once the homeowners have been given the required amount of time to exit the property and either transfer it to a new owner or pay off their debts, the foreclosure process has been completed.
If this sounds confusing, there are two main sources that can explain the process in layman’s terms. A probate lawyer represents the homeowners in court and prepares all of the necessary documents, such as affidavits, judgments, and schedules. The second, and more popular source, is the Inside Mortgage Lenders, a company that provides mortgage funding. In this system, borrowers are placed on a “waves list” where their application is sent to a panel of brokers who evaluate the lenders based solely on merit. Once the evaluation is complete, you are informed if you qualify for the loan. After you have passed the evaluation process, you are informed if your loan has been approved and you can begin the actual foreclosure process.
Does Probate Delay Foreclosure ? Yes Here Are Some Reasons Why
There are many reasons why homeowners find themselves facing a probate delay in their home sale. One of the main reasons is because the homeowner was not completely forthcoming with information provided to the lender when the loan was originally finalized. If the information provided to the lender was inaccurate, the court may order the homeowner to repay the entire loan plus accrued interest and fees. This could potentially result in the homeowners being forced out of their homes. When the borrowers do appear in probate court and the foreclosure sale has been conducted, the previous owners have only days to turn in the keys before the deed is transferred to the heirs of the deceased homeowner.
It is important for homeowners to be aware that there is a probate delay in foreclosure and that the longer it takes them to sell the house, the less likely it is that they will sell it to the heirs. Many homeowners are surprised to learn that their house has been sold after it has gone through the probate process. If the homeowners are in an early stage of foreclosure and need help, the lending institution may provide this assistance. The lending institutions typically do not want to foreclose on properties unless they are absolutely certain that the homeowners are going to be unable to make the monthly mortgage payments. For this reason, it is very common for homeowners to fall behind on their mortgage payments and then face the possibility of having their homes foreclosed on by the courts.
Related Article: Can A Bank Foreclose On A House In Probate