If you request a hearing, you must pay a $25 filing fee to the Massachusetts Registry of Motor Vehicles (RMV). If you do not take action within 20 days, you will also receive a late fee. Failure to pay the speeding fine and the late fee will result in your license being suspended. Default doesn’t necessarily mean that the home is in foreclosure, and a late payment doesn’t necessarily put the loan in default. Generally, when a homeowner misses one mortgage payment, it is simply considered late and the lender assesses a late fee. When a borrower misses a subsequent payment, then the mortgage is considered in default.
1 Alternatives to Foreclosure or Bankruptcy
2 Request Help From a Mortgage Company to Prevent Foreclosure
3 Negotiate Home Loan Modification
4 Foreclosure Procedures: Assignment of the Deed of Trust
Default occurs on a home loan when the borrower defaults, or violates terms, in a mortgage contract. One of the most common forms of default is making late mortgage payments. Default doesn’t necessarily mean that the home is in foreclosure, and a late payment doesn’t necessarily put the loan in default. Generally, when a homeowner misses one mortgage payment, it is simply considered late and the lender assesses a late fee. When a borrower misses a subsequent payment, then the mortgage is considered in default. If a borrower continues to miss mortgage payments, the home will eventually go into foreclosure. It is easier to work out a resolution before a home goes into foreclosure, rather than after.
1
Contact your loan servicer. Be prepared with monthly income and debts, assets and an explanation of your situation. Ask about options available, such as refinancing or a loan modification. Inquire about government mortgage programs your lender participates in that may assist you in your situation. HUD has several Making Home Affordable programs that address a variety of mortgage needs.
2
Call a local HUD-approved housing counselor or the Homeowners HOPE hotline. Housing counselors are trained to help you understand foreclosure law and available options. They can help negotiate your situation with your lender. Call 800-569-4287 to locate a local HUD-approved counselor, or call the Homeowners HOPE Hotline at 888-995-4673 for assistance.
3
Contact a reputable bankruptcy lawyer. Find out the specific laws in your state regarding default and foreclosure. Understand the timeline and what steps your lender must take before your home goes into foreclosure. California foreclosures often occur out of court and may begin as soon as a borrower misses one mortgage payment. In many cases, lenders must make a good faith effort to contact the borrower 30 days before initiating foreclosure proceedings. If there is no resolve in the arrears by the end of 30 days, the lender can file a notice of default, which officially begins the foreclosure process. The borrower has three months to cure the default. Lenders can then have the trustee schedule a sale date, which completes the eviction process. For loans initiated after December 31, 2002, and by January 1, 2008, California law requires an additional 90-day waiting period if the lender does not have an approved modification program in place. Ask your lawyer about options available to you. At some point, you may want to consider Chapter 13 bankruptcy if you want to keep your home. Provide 30 days advance notice to your lawyer if you do.
4
Call your lender weekly. You need to know the status of your loan negotiations. Regularly contacting your lender keeps you updated on any progress. Even if no progress is made, your phone calls show your lender that you want to resolve your loan default.
5
Consider your options. If you are unable to keep your home, you may want to consider a deed-in-lieu or short sale. HUD’s Making Home Affordable programs include incentives for lenders to accept either with no further action required of the borrower. You may even receive $3,000 for moving expenses.
Tip
Don't lose hope. With all the options available to homeowners today, there may be one suited to your situation.
Warning
Don't ignore communications from your lender. Respond as quickly as possible.
References (5)
Resources (5)
About the Author
Sherry Davis Zander began writing professionally in August of 2006. Previously, she worked for Sprint as a project manager. When it comes to subject matter, Zander writes the gamut. She achieved her Bachelor of Arts in management and human relations in 2004 from MidAmerica Nazarene University.
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new home for sale image by itsallgood from Fotolia.com
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Davis, Sherry. 'How Do I Avoid a Foreclosure After a Notice of Default?' Home Guides | SF Gate, http://homeguides.sfgate.com/avoid-foreclosure-after-notice-default-9020.html. Accessed 26 June 2019.
Davis, Sherry. (n.d.). How Do I Avoid a Foreclosure After a Notice of Default? Home Guides | SF Gate. Retrieved from http://homeguides.sfgate.com/avoid-foreclosure-after-notice-default-9020.html
Davis, Sherry. 'How Do I Avoid a Foreclosure After a Notice of Default?' accessed June 26, 2019. http://homeguides.sfgate.com/avoid-foreclosure-after-notice-default-9020.html
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If you default on your car loan, you can almost alwaysexpect the lender to repossess the vehicle. If, after the repossession, youstill owe money pursuant to the loan, the lender may go after you for themoney, or it may choose to charge off the remaining balance. Here’s how it allworks.
Auto Repossessions
Almost always, when you get a loan to purchase a car, the lender(whether it be the dealer or a bank), takes a security interest in the car. Thesecurity interest is meant to guarantee payment – if you default on the loan,the lender has the right to take the car back to cover the loan balance due andowing to it. The lender can take the car back without first suing you andwinning a money judgment. The process of taking the car back is calledrepossession.
This differs from what happens when you default on a loanthat is not secured by your property. In the case of unsecured loans, thelender cannot just take your property. It must first go to court, win a moneyjudgment, and then employ its various options for collecting the judgment.
The Auto Repossession Process
In most states, the lender can repossess the vehicle if youdefault on the loan. Usually, “default” means missing just one car payment. Insome states, the lender must send you a notice of default and give you theopportunity to make up the payments before it repossesses. In other states, nonotice is necessary before repossession.
State law varies as to what is legal when it comes tograbbing your car. For the most part, the lender (or the repossession companyit hires) cannot breach the peace during the process. But in many states it isallowed to hotwire the car, make a duplicate key, or even take it from an opengarage or carport.
The Right to Reinstate the Contract
Most states give car owners a short period of time in whichthey may “reinstate” the contract and get their car back. To do this, you mustmake up the past due payments, interest, and penalties as well as cover therepossession and storage costs incurred by the lender. The right to reinstatemay not be available in every situation, however.
The Right to Redemption
All states allow you to get your car back by redeeming thecontract within a certain period of time after the repossession. To redeem thecontract, you pay off the entire car loan, along with repossession and storagecosts. Most people don’t have the cash on hand to do this.
After the Car Is Sold: Deficiency Balances
If you don’t reinstate or redeem the car by the deadline, thelender will sell the car. If the sale proceeds don’t cover the amount you oweto the lender, plus costs of repossession, storage, and sale, you may be liablefor the balance, called the deficiency. With car repossessions, there is almostalways a deficiency.
The lender can then try to collect the deficiency balancefrom you. So expect collection calls and letters.
Auto Loan Charge Offs
Sometimes the lender decides for accounting purposes that the loan is uncollectible. It might 'charge off' the loan -- meaning it claims the uncollected loan as a business loss. The lender can still sell the uncollected loan to a collection agency, however.
To learn more, check out our section on Your Car in Bankruptcy.