What Can You Do If Your Financial Institution Put Your Home In Foreclosure But Then Put The House Back In Your Name Without Notification?

by A. Sanchez
(San Antonio, Texas)

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What Can You Do If Your Financial Institution Put Your Home In Foreclosure?

My husband and I bought our house but became late on our mortgage payments. We tried to make payment arrangements with our mortgage lender but they were un-agreeable and stated that if we did not pay in full, they would not accept partial payments. So, this lead us to get farther and farther behind because there was no way we could make the payments they were asking.

Then they sent us a letter stating they were going to foreclose on the property in 90 days, so we left. Since the letter stated that they were going to foreclose, we believed it and moved out of our house.

Our original lender sold our mortgage contract to another lender and that lender put the house back in our name without us knowing. For the last 2 years the property has been under our name, without us making a payment and has been effecting our credit even more.

My question is "What can be done to remove our name from the tittle or get help with either selling the house or refinancing.

I know refinancing may not be an option since our credit score is low, but want to know my options! Thanks for the help!

Mortgage Foreclosure Answer:

by Mortgage Foreclosure Expert - Dan North

Your original lender may have threatened to foreclose in 90 days but never carried through with the threat. The house was in your name the whole time. You could have continued to live in your home for the last two years and just waited for eviction after the foreclosure sale date before moving out.

Mortgage Foreclosure Would Be More Damaging To Your Credit

Your credit would be hurt more by a foreclosure than not making payments. Foreclosure will stay on you credit report for 7 years and you can get your credit fixed faster than that for missed payments.

What Are Your Options?

Review your options in Loss Mitigation and Home Loan Modification.

At this point you have several options:

Move back into the house

Rent out the house to someone else and collect rent

Apply for a loan modification with the new lender

Sell the house either at fair market value if your mortgage is not upside down

Offer to Short-Sell the house if your mortgage is upside down

Offer a Deed In Lieu of Foreclosure to walk away from the house and have it out of your name

Or just do nothing

Loan Modification

To be eligible for loan modification under HAMP you need to be living in the home so would have to move back in to apply for HAMP under the Making Home Affordable Program.

If you do not want to move back into the house you can still request a loan modification but it would not be a government program.

Your new lender may be willing to offer a good modification since they have not foreclosed in two years. It is possible that the new lender bought the Loan at a discount because it was a non-performing loan.

Rent Out Your Home

If your home is habitable and you do not intend to move back in, rent out the home. Save up the money you get from rent and use it to settle with the lender. Maybe you will end up owning a rental property that pays you monthly income.

Just do not leave the house vacant. It will deteriorate, lose value and may be vandalized or you have squatters move in and destroy the place.

Put Your House Up For Sale

Hire a Realtor to sell your house. If you owe more than the house is worth get a Realtor who can do Short Sales.

Once the house sells you will have settled the mortgage with the new lender.

You can even have the house rented out while you have it up for sale so that it is generating income for you.

Deed In Lieu Of Foreclosure

You will have to have your house on the market for a certain period of time (varies from lender to lender) and attempt to sell it before the lender will accept a Deed In Lieu of Foreclosure.

You Are Right - Refinancing Is Not An Option

Your mortgage would have to be current to arrange refinancing.

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