Receiving anything from a mortgage lender that mentions the words “foreclosure” or “legal action” can be overwhelming. As soon as they read those words, many people have trouble understanding the rest of the notice. However, receiving a first notice from your mortgage lender does not mean you will automatically lose your home. It also doesn’t mean the foreclosure itself has started. You can still save your home, but you need to act quickly. Here’s a look at what you need to know — from understanding the first notice (lis pendens) to knowing when to contact legal help.
Foreclosure is a life-changing event, but the good news is that it doesn’t happen overnight. When you understand the meaning of a first notice and your rights under Ohio law, you’ll be better equipped to find a solution that works for you and your family.
Understanding the First Notice (Lis Pendens)
Foreclosure Hasn’t Been Started — But It Might Be on the Horizon
The Latin name for this notice — lis pendens, or “suit pending” — efficiently sums up what it means. When you receive a first notice, you’re right to be concerned, but you still have time to act. This is a notice that the lender intends to file a foreclosure lawsuit against you. You might sometimes hear a first notice called a “notice of default.”
State law does not give the lender a specific deadline for when they must send the notice. However, once a lender has sent you the first notice, under the law you must be allowed 28 days to “cure” the default, or catch up on payments.
Options to Stop Foreclosure After the First Notice
While the wording of a first notice may sound scary, it is essentially a warning letter. However, that doesn’t mean you shouldn’t take immediate action. Acting quickly can increase your chances of being able to keep your home while preserving your relationship with your lender. Here are some of the options you may have for stopping foreclosure as soon as possible:
Forbearance
With this option, a lender grants you a temporary suspension of payments. This can be a good choice if you know or anticipate that your financial situation will improve in the near future. For example, if you just started a job that pays very well but you won’t be paid for another month, your lender might suspend your payments until you have the income to continue paying your mortgage.
Modification of Loan Terms
Sometimes, a lender can help you by changing the terms of your loan to make payments easier. There are several ways lenders can do this:
- Lengthening the loan term so monthly payments are lower
- Lowering the interest rate
- Rolling your missed payments into the loan balance
Modifying loan terms can be a hassle for lenders, but it’s a much smaller hassle than the foreclosure process. As a result, your lender has an incentive to work with you.
Bankruptcy
Bankruptcy comes with many challenges, and declaring bankruptcy is not something to ever rush into. However, because declaring bankruptcy halts foreclosure proceedings, it can be a last resort if other attempts to save your home have been unsuccessful. Our team has experience helping homeowners navigate bankruptcy. We can help you decide whether bankruptcy is your best option for saving your home.
Deed in Lieu of Foreclosure
If you won’t realistically be able to repay your mortgage even with adjustments, a deed in lieu of foreclosure is a simpler alternative to foreclosure. Instead of going through the process of a foreclosure lawsuit, you simply give the lender the deed to the home.
Unless you have experience handling foreclosure, it can be difficult to weigh your options and decide the best course forward. Let us help. Call Fesenmyer Cousino Weinzimmer at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to get started with a free consultation about bankruptcy options.
Short Sale
A short sale is when you and your lender agree to have you sell the home for less than you owe on the loan balance. These sales are complicated, because all final offers must be approved by the lender. You also may still have to pay the lender back what remains on your loan balance after the sale. However, a short sale will damage your credit far less than foreclosure.
Foreclosure Mediation
The Ohio court system offers foreclosure mediation to help those facing foreclosure work out agreements with their lenders. You can go through this process at any point in the foreclosure process. However, if you’ve just received a first notice, it’s worth trying to informally work out an agreement with the lender before going the mediation route.
The Importance of Acting Quickly
When it comes to dealing with foreclosure (or the prospect of foreclosure), it’s better to act sooner rather than later. While there are still steps you can take to keep your home after a lawsuit has been filed, waiting to act until the process is further along almost always means you’ll be dealing with more paperwork, more time, and, sometimes, even more money. Lenders also appreciate homeowners who take the initiative to reach out when they’re having problems. If you reach out now, your lender may be able to work out a repayment plan or other arrangement with you without having to go through the courts.
Seeking Legal Help
You Need a Trusted Advocate
If you find yourself in a situation where you are not able to catch up on your mortgage payments, bankruptcy may be an option to help save your home. The attorneys at Fesenmyer Cousino Weinzimmer take the time to listen to each client and come up with a specialized plan for your situation. The sooner you take action after receiving a foreclosure notice, the better the chances of a positive outcome.
If you are considering bankruptcy as a way to save your home from foreclosure, our attorneys can help. Call Fesenmyer Cousino Weinzimmer at 614-228-4435 (Columbus), 937-222-7472 (Dayton), or 877-654-5297 (Cincinnati) to schedule your free consultation today.
