How To Stop Eviction After a Foreclosure

The foreclosure process is a frightening one for any homeowner. The prospect of eviction after foreclosure is particularly upsetting. Fortunately, there are many options available to struggling homeowners facing foreclosure eviction. Read on to learn more about your legal rights and how to stop eviction after a foreclosure.

The Foreclosure and Eviction Process

It is important to understand your state's foreclosure laws and the eviction process. The exact procedure will depend on whether the foreclosure action is a nonjudicial foreclosure or a judicial foreclosure. Judicial foreclosure requires the lender to get a court order, whereas nonjudicial foreclosure does not.

After a borrower defaults on a certain number of mortgage payments, the lender has the option to start foreclosure proceedings. You can expect to receive notices at various stages of the foreclosure process. The exact types of notices will depend on the laws of your state. For this reason, it's important to review all correspondence you receive from your lender.

First, you will receive a notice of default, in which the lender will give you a certain amount of time to correct the nonpayment. Do not ignore the notices of default that you receive. It is very likely that if you contact the lender, they will work with you to help bring your account back current. That could include options such as moving the owed amount to the back end of the loan or setting up payment arrangements.

However, if you do not correct the nonpayment in time, you will receive a foreclosure notice. This notice informs you that the lender has initiated foreclosure proceedings. There are other legal options that you can take to prevent foreclosure, but if you do nothing the next notice you will receive is an eviction notice. This means the lender has sold the foreclosed property and you must vacate the property according to your state laws.

If you're unable to pay back your outstanding mortgage payments in time, the lender will attempt to sell the property at a foreclosure sale. If there is no acceptable bid, your lender may end up with the title to your home. Otherwise, the winner becomes the new owner and can begin legal proceedings to evict you. This is known as an "unlawful detainer" action. Because you are now a former owner, the new owner is only obligated to give you 3 days' notice to move out of the residential property. 

If you do not vacate the property within that time, the court will issue a writ of possession. This allows a sheriff to remove you from the property. The process can change according to your state's rules if you are a tenant living in a home that was foreclosed against the owner. 

Typically, the new owner must honor the terms of the lease agreement that you are currently in with the original owner. Once the lease ends, you will be required to move. If you, as the tenant, do not move then the eviction process will begin, and you will be removed from the property.

The options available to you in an eviction case will depend on whether a foreclosure sale has already occurred.

Before a Foreclosure Sale

Before the foreclosure sale, you can take steps to prevent foreclosure altogether. Communicate with your lender. Discuss how much you can afford to pay each month towards your outstanding balance. It may be possible to work out a payment plan and stay in your home. There may also be government aid available to you. This includes counseling available for those facing foreclosure through the U.S. Department of Housing and Urban Development.

Another option to stop an eviction is to file for bankruptcy. This postpones a foreclosure sale until the bankruptcy is finalized. This may give you time to work out a plan to bring your mortgage payments current with your lender. However, the decision to file for bankruptcy is significant, and the process is complex. This option should also be discussed in detail with a bankruptcy attorney, so it may not be an ideal "quick fix" to a pending foreclosure or eviction.

After a Foreclosure Sale

Even if your home has already been sold at a foreclosure sale, options may still be available to delay or prevent an eviction. Depending on the laws of your state, you may be able to regain ownership of your home and avoid eviction through a process known as statutory redemption. If your state allows for statutory redemption, during the redemption period you can "redeem" your property by paying off the purchase price of the house (plus costs and interest) after the foreclosure sale.

If statutory redemption is not available for financial reasons, you also have the option to move out of the home to avoid eviction proceedings. You may want to consider negotiating your voluntary move-out so that the new owner need not evict you. Having an unlawful detainer judgment on your record will negatively impact your credit score, which may make it difficult to qualify as a renter. 

In some situations, the new homeowner may be willing to offer you "cash for keys," which is a lump-sum cash offer if you agree to vacate the home within a specified period of time and leave the property in good condition.

If an unlawful detainer action has already been filed, you may have an opportunity to oppose the action in court. Make sure to review any legal documents you have received with an attorney. Take note of all deadlines to file responsive pleadings, and any scheduled court dates.

Moreover, if you are a tenant living in a foreclosed property connected to a federal mortgage loan, the new owner must follow the Protecting Tenants at Foreclosure Act (PTFA). Pursuant to the PTFA, any new owner is subject to the tenant's rights and takes over the original rental agreement.

Get Matched With a Foreclosure Attorney

Navigating foreclosure and eviction can be daunting. Consulting with an experienced attorney can help you understand the process and explore all available options. Contact a local foreclosure attorney today for legal advice.