In simple terms, land foreclosure is a harsh step taken by banks and law enforcement agencies when the owner of the land fails to pay off the borrowed money on time as agreed with the bank. In case of land foreclosure, several people and their families become homeless until they repay the loan in full. This is a very difficult and unpleasant situation which brings pain and sorrow to the affected people and their families. Generally, banks seize you’re when-
- You are out of the job all of a sudden because of different reasons,
- You are unable to continue your job because of medical problems,
- You are under huge debt and utility bills are mounting against your head with each passing day,
- You have regular violent arguments with co-owner and divorce,
- Your transfer to another city and
- You fail to maintain your house as directed by the relevant administration.
So, how you can deal with Land Foreclosure and get your land back? Let’s study and find out-
01. Communicate With the Bank officers
Always keep in mind that the procedures of foreclosure vary from one state to another. So, if you are living in a state where mortgages are used, homeowners can maintain the ownership of these houses for almost one year. In states where trust is used, the seller has less than 4 months to sale the house.
You must always remember that almost all states offer a certain period of redemption. So, the seller gets the right to communicate with the landowner and strike a deal with him/her for the payment of all the pending amount including the applicable fees and charges to regain the control of the land. You should include a real estate lawyer in the deal to understand different laws regarding deal and make a lawful deal which services your interest very well.
In several states, as mandated by the law, purchasers have to give specific information if they want to gain shares in a property. Failure to do so can provoke the law enforcement agencies to cancel the deal, impose fines, and initiate legal cases.
02. Go for Short Sale
If the lender is ready to foreclose your house and schedule an action for it, you can contact him/her and ask to review the decision. If he/she finds the buyer, he will foreclose your land resell it to buyer for a short period of time. It happens because the lender fails to find a good buyer in the market. If your property is put on sale in the market, you should look for a suitable buyer and convince him/her for a short sale. Once you have sufficient money in your hands, you can purchase your land once again from him/her.
03. Announce Bankruptcy
Announcing the bankruptcy status is one of the most effective ways to stop the foreclosure procedure. As soon as you apply for bankruptcy, Federal law prevents the debt collectors to stop the collection activities. As Foreclosure is considered a collection activity. So, the lender can’t seize your property if you have filed for bankruptcy.
But, there is a problem. When you go to the court to file the case, court appoints a mediator between you and your creditors and evaluate your actual condition. After announcing the bankruptcy, you can find a good job and reach a deal with the lender to repay the loan in small installments. For this, you need to contact a bankruptcy lawyer, explain each and everything very well and declare yourself as a bankrupt, which will give you temporary respite.
04. Give The Land on Lease
Most loans these days are no longer expected. The average mortgage now contains a term-of-sale clause under which the borrower agrees to repay the loan in full if and when they transfer the property. However, if you are faced with a foreclosure, you can convince your lender to change your loan, remove this item, and allow another buyer to take over your loan. The lender may want to examine the qualifications of the new buyer, but it can be a win-win option for everyone. You may be able to negotiate a down payment from a buyer that you can use to pay off your outstanding mortgage balance.
In the case of an option lease, the buyer becomes your tenant, and you continue to own property as long as the buyer does not have enough money saved the initial payment will not improve your loan or sell your other house. In some situations, the buyer will make a one-time, one-time advance payment option by paying you to be able to purchase your home. You can apply a payment option to bring your mortgage current. The buyer will then make monthly rental payments, which You, the seller, then apply to your mortgage.
The land foreclosure is a very unfortunate situation for the landlord. By following the above-mentioned tips, you can stop land foreclosure procedure and make a suitable deal with the credit lender to settle the matter peacefully on a later date.
Sophie is a blogger who wrote all sorts of content about Estate planning, building & construction law, and legal matters between families & small to medium businesses. She spends a lot of time brainstorming and sharing knowledge about property laws to make people aware of Conveyancing.