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When it comes to houses, nothing is quite as frightening as the prospect of losing it. Fire, flood, or financial strain can all be valid threats against the place we call home. When fire or flood strike, we have insurance. What about financial strain? How can you save your house if you are behind on payments and getting notices in the mail with dreaded words like forfeit or foreclose?
I will start by saying that forfeiture is quicker than foreclosure and it is extremely important that you seek immediate legal advice if you have received a Notice of Intent to Forfeit or a Declaration of Forfeiture. The focus of this article is to educate you, the reader, on the basics of forfeiture. While it is also important, foreclosure has its own lengthy process and will not be discussed at length here. It is critical to note that buyers have fewer rights in a forfeiture compared to a foreclosure.
To provide some background, forfeiture is only a possibility when you have purchased your home with a real estate contract. When a borrower cannot get traditional financing, sometimes a seller will offer to be the lender for the buyer. This means a contract is made and the buyer pays the seller directly or through a management company. Under a real estate contract, the seller still has the title to the house until it is paid off by the buyer.
If you fall behind on payments or violate some other part of the real estate contract, the seller has the right to file a Notice of Intent to Forfeit. The seller does not have to take you to court to start these proceedings. You will have 90 days to challenge this notice before the seller can file a Declaration of Forfeiture. This declaration is often final. During the 90 days, however, you can ‘cure’ any issues by catching up on payments or solving any other violations of the contract.
If you do not cure the issues, or ‘defaults,’ and the declaration is filed, you will have just ten days to move out of the property before the seller can start the eviction process. If your contract is forfeited, you will not get any of your money back. If the seller has no other claims against you, you will not owe any additional money after the property is forfeited.
There may be other options to stop the forfeiture, but these must be done quickly and you will need an attorney. If you are facing forfeiture, contact Northwest Consumer Law Center right away.