Confused about Default...

[Amy26]

Hi there! I am letting my home go. I stopped paying on it either in March or April of this year... I can't remember which.

I received a certified letter in the mail from my mortgage company on June 4th that says "Notice of Default". It goes on to say to cure the default I have to pay in certified funds bla bla...

I read in other posts that they won't start the foreclosure process until you receive this notice of default letter...so, does this mean that my foreclosure will be coming soon?

I am concerned because I have renters living in the property now and I told them not to worry that they could probably live there for quite some time. But, since I got this notice...does that mean time is short?

The letter said I had 35 days from the date of the letter to cure the default.

[Amy26]

Nobody knows the answer to this?

[AngelinaCatHub]

Nobody knows the answer to this?

Probably so, Amy. It is hard to determine the future as I am sure in this economy, your mortgage company is fairly swamped with letters like that going out. You may be fortunate that they are busy. In any case, it will still take some time as you already have more than a month, and other such legal things have to happen. A foreclosure is similar to a law suit. Then if they wish you out of the house, eviction is a law suit. Not for money but that's when the Sheriff can remove your stuff to the street. You will have more time.

Also, the mortgage company is likely to allow your renters to stay. After all the renters are paying rent so the mortgage company wants the money not the house. They may even be offered the house on sale. Tell your renters that possibility for them. Hope this helps a bit. 'Hub

[HHM]

Does the notice have a sale date on it?

Simple type "Foreclosure timeline" in google and find your state, it will give you an idea of how long it will take.

If there is no sale date on the notice, than what you received is probably a notice of acceleration...i.e. you have 30 days to cure the missed payments, or the whole balance becomes due. Once the 30 days expires, then the home will probably be assigned for foreclosure. From there, it just depends on how your state conducts foreclosure.

[Amy26]

Oh HHM thanks... I think that is what the letter was. It said I had 35 days to cure the default. There was no sale date or anything listed on it.

And they are not getting any money whatsoever, my renters are living there for free Hub.

I tried to look up the foreclosure timeline you suggested but every site I click on has a different period for virginia. Some say 4 months and some say 2 months. And what date do they go off of? Per HHM, I think I got an "acceleration letter". So, will I still need to wait till they send me a letter with a sale date?

Me so confused!

[knotholeone]

I have a question. In a chapter 13, how long do you have to make the decision to walk away from your home? Also do you have to pay the difference btween what it sells for and what you owe. I am upside down in Virginia. Please help.

[Amy26]

So, my mortgage company filed for a relief from the stay... the hearing is set for 9/2 which isn't too long before my case should be discharged. I assume they can't do anything until this hearing. But if they are filing for a relief from the stay, how long after the relief is granted would I have to stay in the home?

[DeadManCrawling]

In some states, the lender has to start foreclosure again from the beginning once relief is granted. I do not know if that is the case in your area.

If you are hoping to extend the process to gain more time in the home, ask your lawyer to answer the lender in court proceedings. My attorney will be doing this for us and hopes to extend our time in the home by as much as 12-24 months. There are no hard and fast rules, and no way to know for sure, but any answer is usually better-if you want to stay longer.

With so many foreclosures, many lenders are contracting with lawyers for a flat rate, they get paid per-house. In this situation, it makes perfect sense that those who fight back get shuffled to the last of the line, as there is far less profit in us.

Also, we figure that the cost will only be a few hundred dollars, though it could certainly get higher, and we will address that if/when we must.

An example I know of, from an attorney's forum: The attorney motioned for a 30 day extension to gather "further information". The motion was heard SIX MONTHS later, and was granted, for a total of seven months before they even had to answer.

[Amy26]

Well, I don't want to stay in the house I have renters in it. They are the ones I'm worried for because I don't know how long to tell them they can stay. My case should be discharged by the 18th of September so the mortgage company wouldn't need the stay lifted after that time because the case would be closed.

I told my renters that they could probably stay in the condo until January or so but I really can't figure out how long I would have after they get the stay lifted. I also don't want to just tell my renters oh by the way the mortgage company filed a relief from the stay but that's all I know... that's not very informative.

I just want a straight answer that after the mortgage company gets a stay relief that they will start foreclosure immediately? I assume they aren't getting the stay lifted just for poops and giggles?

[Amy26]

Anybody else have any thoughts on this?

[MollyB]

Once the lender gets relief from stay, the foreclosure proceeding usually starts immediately. That used to mean that the lender would get the file to an attorney within a couple of weeks, and then the f/c process in VA would take 90-120 days until the sale date. Depending upon who purchased the property (the lender or a third party), the debtor might have to be out of the property within 24 hours, or up to 6 weeks later.

That timeline has a lot more lag time now. More states now are adding "required notice" time, which frequently adds 45 days to the beginning of the process. (I don't know if VA has that yet, but NC and MD have, so it's probably just a matter of time before the VA legislature adds it.) Lenders, attorneys and the court system alike are buried in files and paperwork which take more time, and most of them (lenders and attorneys, anyway) have had to hire more people, meaning trainees who don't move as quickly on top of that. And what DeadManCrawling said about fighting the process is absolutely dead on -- less profit for the attorney, so that file will be more likely to be pushed to the side for a while.

All of which is to say: your lender will start the process immediately, but it will likely take several months. As always, YMMV and Every Case Is Different.

MollyB