There are plenty of myths and misconceptions about foreclosure case law that circulate through society. Fortunately, most of them aren’t true. At Claim Surplus, we can help you sort out the facts from fiction by debunking myths about foreclosure law.

Myth: Foreclosure starts after one missed payment.

While missing even one mortgage payment isn’t ideal, it’s not enough to trigger a foreclosure. Keep in mind that lenders don’t want their borrowers to foreclose on their property. They would rather work with them to prevent it. However, after three months of payments are missed, the lender will start the process.

Myth: Nothing can stop a foreclosure.

Many homeowners are fearful that once the foreclosure process has started, there’s no stopping it. It might not feel like it when you’re involved in one, but a foreclosure can be halted. You can work with a foreclosure attorney to put together a defense for your missed payments, help to prolong your foreclosure or find an alternative solution to foreclosure.

Myth: Homeowners must draw from savings to pay a mortgage.

Remember that banks aren’t loan sharks or nefarious entities that are going to try to do everything they can to get your money. You don’t have to cash out your 401(k) or dip into a pension to catch up on missed mortgage payments to prevent. A bank would rather foreclose on your home and sell it at auction than ruin you financially for the rest of your life. You don’t need to take drastic steps during a foreclosure. Instead, you can simply cut back your spending to help.

Myth: You’re free to walk away after a foreclosure.

Unfortunately, most homeowners can’t simply cut their losses and walk away from a foreclosure. It depends on several factors that include debts owed on the house in taxes and other claims, as well as the difference in the remaining amount of the loan and the amount it was sold for at auction.

Myth: Bankruptcy will stop foreclosure.

Bankruptcy can help to put a stay on your foreclosure, but it won’t stop it entirely. A homeowner who files for bankruptcy will be allowed to put off making mortgage payments for a set amount of time, but the lender can still require the judge to remove the stay after a period. Those who file for Chapter 13 bankruptcy can work with the lender to create a repayment plan that will allow them to make payments over time rather than foreclose. If an agreement cannot be reached, the individual who filed for bankruptcy will still likely lose their home.

Myth: You can’t buy another home after a foreclosure.

A foreclosure will have a significant impact on your credit rating for several years, which will make it difficult to get approved for a loan. Eventually, you will be able to buy a home again, but it will certainly take some time for your credit to recover to where you can qualify for a loan.

Get in touch for more.

You can learn more about what’s true or false by reaching out to us at Claim Surplus. We work with a network of foreclosure attorneys who can help you through the process and ensure that you’re treated fairly. Give us a call at 407-759-6226 to schedule an appointment with our team. If you have questions for us before getting started, don’t hesitate to send an email to info@claimsurplus.com or use our online contact form.