Can my lender foreclose on my home while I am in loan modification?
Full Question:
Answer:
Unfortunately, it is common for a lender to pursue foreclosure proceedings while also maintaining a loan modification application. Many lenders say 'dual tracking' protects their investment if the homeowner was unable to qualify for new loan terms, though it may have the effect of confusing some borrowers into believing they would not lose their homes.
We would recommend that you discuss your particular facts with a local attorney.
The State of West Virginia allows both judicial and non-judicial foreclosures. Non-judicial foreclosures usually proceed if there is a power of sale clause in the mortgage or deed of trust that secures the property. Borrowers in West Virginia that undergo foreclosure do not have the right of redemption. Lenders in West Virginia do not have the right to seek deficiency judgments. A typical West Virginia foreclosure will take about 60 days as most of them are non-judicial.
Many of the foreclosures that take place in this state are non-judicial foreclosures as most mortgage and deeds of trust have a power of sale clause written into the instrument. The power of sale clause gives the lender to sell the property to recoup their loss if the borrower defaults on the mortgage.
The power of sale clause will usually state that if the borrower is delinquent in their payments for more than 30 days, the power of sale can be enforced. Many of the power of sale clauses will state the specifics of the foreclosure sale such as the terms of the sale and the place. If the mortgage or deed of trust does not specify the exact date and time, the non judicial foreclosure reverts to West Virginia foreclosure law.
If nothing is specified in the power of sale clause in the deed of trust or mortgage, the notice of sale must be posted on the property door as well as three other places that must be made public. This has to occur at least 20 days before the sale. Notice must be served on the borrower as well as any other lien holders at this time as well. The sale must be published in a newspaper or other legal publication in the property county for at least 4 weeks prior to the sale.
The sale will then offer the property for public auction with the highest bidder getting the property. Buyers of foreclosed property in West Virginia must be able to pay for at least 1/3 of the property in cash.
A judicial foreclosure will take place in West Virginia if there is no power of sale clause in the mortgage or deed of sale. In this case, a suit is filed in the county where the property is located. A judicial foreclosure will usually take longer than a non-judicial foreclosure, in some cases it can take up to 4 months. Most mortgages made in West Virginia, however, have a power of sale clause in the securing instrument.
Borrowers in West Virginia, unlike other states, have no right of redemption when it comes to their property. Once the property is sold through foreclosure auction, the borrower does not have the opportunity to make restitution. The lender cannot seek a deficiency judgment in the State of West Virginia as they are not permitted by law.
Because the lender cannot seek a deficiency judgment in the case of a foreclosure in West Virginia, they are more inclined to be wiling to negotiate with a loss mitigation firm. One way that you can get foreclosure help if you have property in West Virginia is to seek help from a loss mitigation consulting team. In many cases, they can negotiate a settlement with the lender that will allow you to walk away from the property without having to have a foreclosure on your record.
Many people today in West Virginia owe more on their property than their property is worth. This is due to the fact that home prices have fallen in recent years and many people have borrowed second mortgage or refinanced their home to obtain the equity. Loss mitigation can help you stop foreclosure as a foreclosure expert can negotiate with the lender to let you off the hook for the mortgage and allow an investor to purchase the property. The investor pays off most of what you owe to the lender, the lender releases the lien on the property and you get to walk away from the deal without the foreclosure on your record.
Most lenders know that when a property is auctioned up for foreclosure that they will not recoup all of their losses. On top of that, it can be costly to pursue a foreclosure in the state of Virginia, even a non-judicial foreclosure. Many lenders are more than willing to work with loss mitigation experts to come up with a solution that satisfies both the lender and the borrower.