Foreclosure most commonly refers to a lender taking possession of a property for non-payment of a mortgage loan. However, the status of mortgage payments is just one cause of foreclosures.
Other causes include the owner’s unpaid debt to other parties, a homeowner not meeting other aspects of the loan agreement, and payments misdirected to the wrong lender.
Therefore even when payments are current, there are several circumstances where the bank can still foreclose.
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5 Reasons Foreclosure May Happen Even When Payments are Current
1. There Are Unpaid Property Taxes
Local governments collect property taxes on homes. Sometimes those taxes are paid as part of mortgage payments (usually under the term escrow). For taxes due separate from the mortgage payment, it is the homeowner’s responsibility to pay the taxes to the government. If they do not pay, the bank may pay the taxes owed. If a homeowner fails to reimburse the bank, the bank can foreclose.
2. Homeowners Insurance Not Up To Date
Not having homeowners insurance can be a valid reason for a lender to foreclose on a property. Like property taxes, the mortgage contract likely includes a clause requiring a homeowner to maintain adequate homeowners insurance. Failure to maintain the coverage would violate the mortgage contract.
3. There Are Violations of Other Mortgage Contract Conditions
Any mortgage contract term violated by the homeowner, not just failing to pay the mortgage, could be grounds for foreclosure. For instance, most mortgages require the homeowner to keep the property in satisfactory condition. If the homeowner does not do this, the bank can seek to foreclose. A contract violation, such as transferring ownership to another party, may also result in foreclosure.
4. Home Owner Association (HOA) Fees Are Past Due
In more recent years, HOAs have become popular entities. An HOA is a community board that makes rules and regulations and provides the upkeep of the shared areas in a specific neighborhood. Homeowners in these neighborhoods are required to pay HOA dues.
When a homeowner fails to pay their HOA dues or assessments, the HOA may seek court assistance to sell their home and collect the debt owed. This type of home loss can occur even if all mortgage payments are current.
5. Homeowner Paid Mortgage To Incorrect Bank
A mortgage loan may be held by one bank initially, then taken over by another. While the homeowner’s records may indicate that they have been paying the mortgage, they may not have been paying to the right bank. The cause may be a clerical error on the homeowner’s part or that of one of the banks. Regardless, if the current lender is not getting the payments, foreclosure is possible.
You Should Have Legal Help in a Foreclosure Case
If you or someone you know may be facing foreclosure, look into hiring a lawyer immediately. An attorney will review your mortgage contract and all relevant documents, hear your side of the matter, and defend you in the foreclosure process. A foreclosure defense lawyer gives you the best opportunity to keep your home.
Vantage Group Legal Services Will Defend You in a Foreclosure Case
No matter the circumstances, Vantage Group Legal Services can assist you in a foreclosure situation. As a unique company with a team of specialized Attorney’s in foreclosure defense, Vantage Group Legal Services connects you with an experienced network attorney and will give you a no-obligation, free consultation.
Once you retain Vantage Group Legal Services, your assigned network attorney and Vantage’s internal support staff will handle all aspects of your case during your contract with them.
Chicago foreclosure defense attorneys in Vantage Group Legal Services’ network are chosen because of their ability to win cases and achieve success for their clients. Contact Vantage Group by phone at (773) 938-4747 or online.