A looming foreclosure sale might have you concerned about the money you’ve already paid toward property ownership. What happens to equity in a foreclosure? Cozmyk Law’s foreclosure lawyer in Ohio outlines the outcomes below. 

The Foreclosure Process

A property foreclosure is an extensive, complicated process involving numerous steps, documentation, and communication among you, the courts, and your lender. You’ll find a simplified overview of what happens during a foreclosure below. 

Preforeclosure

Preforeclosure refers to the period when you can’t make your outstanding mortgage balance, but your lender hasn’t filed a complaint yet. Your lender might add additional fees and outline ways to avoid the impending foreclosure.

Summons, Complaints, and Answers

The foreclosure process begins when your lender files a summons and complaint against you. These documents detail the reasons behind the complaint and how to file your response. Consulting with and retaining a foreclosure attorney can help you navigate this stage.  

Judgment 

Once you file your response, the litigation proceedings begin. The case goes through the Ohio court system while a judge determines whether to rule in your or the lender’s favor. If your lender wins this litigation, they can auction your property to the public. 

Property Sale

Your property goes to the highest bidder during the public auction. The lender typically  buys the property back if no bidder can afford the starting auction price. Then, you have the opportunity to cover your mortgage balance and late fees and court costs during the redemption period. Once a sale occurs, you may redeem the property at any time prior to the confirmation of sale. 

Your Foreclosure Rights

So, what happens to equity in a foreclosure? First, you must understand your rights throughout the proceedings to protect yourself and your property. Throughout the foreclosure proceedings, you have the right to:

• Receive a breach letter detailing the impending proceedings before foreclosure begins.
• Request mitigation.
• Receive an official foreclosure notice.
• Respond within the predetermined time frame.
• Avoid foreclosure by paying your outstanding balance in full.
• Apply protections and privileges if you served in the military.
• Purchase your property back following the public auction.
• Receive any additional profits from the sale once the outstanding balance and foreclosure costs are covered. 

What Happens to Equity in a Foreclosure?

If you have successfully paid for part of your mortgage, you have partial ownership of the property. That means you have home equity. You can find your equity amount by subtracting the money you owe from the property’s current market value. 

You don’t lose that equity outright after finalizing a foreclosure. As mentioned above, you have a right to receive the rest of the money made on the property sale. First, your lender covers what you owe and the foreclosure expenses. The rest is your equity. 

Often, foreclosed homes sell for less than their actual market value. Therefore, the amount you receive might be less than what you paid.  If you have lost your home in a sale, there could be money left over that you are entitled to and Cozmyk Law Offices, LLC can help you to recover that overage. 

Have Your Case Evaluated by a Competent Foreclosure Attorney at Cozmyk Law

What happens to equity in a foreclosure? That depends on the property’s final sale price. Many foreclosed properties sell for less than their worth.  

Is it too late to stop a foreclosure? Let Cozmyk Law help you answer that question. Call 216-452-9145 for a free case evaluation in Ohio.