When a homeowner falls behind on their mortgage payments, the lender may begin the process of repossessing the home. This can be a stressful and overwhelming experience for the homeowner, but it’s important to know that there are legal protections in place to safeguard their rights.
One of the first things homeowners should understand is that lenders are required to follow a specific process when repossessing a home. This process varies by state, but generally, the lender must first send the homeowner a notice of default, which gives the homeowner a certain amount of time to catch up on their payments. If the homeowner is unable to do so, the lender may proceed with the repossession process.
During this process, homeowners have the right to challenge the repossession in court. This is known as a “defense to foreclosure,” and it allows homeowners to argue that the lender has not followed the proper procedures or that there are other circumstances that justify keeping the home. For example, homeowners may be able to show that the lender did not properly serve the notice of default or that the lender made errors in the mortgage documents.
Even if the homeowner is unable to challenge the repossession, they may still have the right to remain in the home until the sale is final. This is known as “redemption” or “right of possession,” and it allows homeowners to continue living in the home until it is sold at auction. In some states, homeowners may be able to purchase the home back from the lender during this period by paying off the outstanding balance on the mortgage.
It’s also important for homeowners to know that they have certain rights after the repossession process is complete. For example, homeowners may be entitled to receive a “deficiency judgment,” which is a court order requiring the lender to pay the homeowner any remaining balance on the mortgage after the sale of the home. This is typically only available in states that allow for non-judicial foreclosures, where the lender does not need to go through the court system to repossess the home.
In summary, homeowners have legal rights during the repossession process that can help protect their interests and potentially allow them to keep their home. It’s important for homeowners to understand these rights and seek legal assistance if they believe their rights have been violated during the repossession process.