Preforeclosure is the period of time between missing your first payment and the foreclosure lawsuit being filed.
Ohio Preforeclosure vs Foreclosure
In Ohio, a lawsuit must be filed by the bank in court in order to take your home. The lawsuit demands the total amount due under the loan. It also demands that your property be sold to pay that loan back. The bank has the right to demand that payment because of the mortgage. The mortgage is usually about 15 pages long and is a security agreement. A security agreement is a fancy way to say that the home secures the payment of the loan. The loan is just a contract to pay back money. The combination of the note and the mortgage in a lawsuit makes it a foreclosure. The process of ending your rights in the property to sell it at auction is referred to as the foreclosure.
The time period prior to filing the lawsuit is generally referred to as preforeclosure. The preforeclosure meaning usually refers to the entire time period prior to the foreclosure lawsuit. It does not mean the time period prior to the sale of the property. The sale of the property only occurs after the entire foreclosure process has run its course. Thus, the preforeclosure meaning is not limited to the sale period, but the period prior to the entire foreclosure lawsuit beginning.
The Preforeclosure Period
The preforeclosure period begins with the first missed payment. Once you miss a payment, federal law requires that your mortgage company contact you at least one time per month before filing foreclosure. During these calls, your mortgage company is required to see how it can help you avoid foreclosure. If you ask for a "loss mitigation application," it will be required to take additional steps to help you avoid foreclosure. This will include underwriting you for a loan modification. Federal law requires it review you for all loss mitigation options it offers upon your request. This requirement exists under RESPA during the preforeclosure period and during foreclosure.
During the preforeclosure period, your mortgage company is prohibited from filing foreclosure until you are 120 days past due. Also, it is usually required under the terms of the mortgage to send you a notice of acceleration during this preforeclosure period. That notice will identify why they allege your loan is in default and what you need to do to resolve the default. The notice usually requires the mortgage company wait 30 days before it files foreclosure. Once that time period has expired and if 120 days has passed, then the preforeclosure period is over and your lender can file foreclosure.
Our lawyers are experienced in helping people in preforeclosure and understand the meaning of preforeclosure. Contact us today.
Preforeclosure Is Not the Sale
Sometimes people think that the period just before the auction is the preforeclosure period. However, the sale just the procedural mechanism to sell the property. The foreclosure sale is actually very late in the legal process, well after preforeclosure has passed. Therefore, we do not include the period before the foreclosure sale in the preforeclosure meaning.
Hiring a foreclosure lawyers during the point of preforeclosure period is best because it offers more opportunities to get a deal done short of losing your home. Hiring a lawyer during preforeclosure also enables a firm like ours to explore whether filing a new lawsuit under RESPA will help your case.