Wednesday, May 1, 2013

Destroyed Property Now in Foreclosure: Rebuild or Walk Away?

Question: We are in the early stages of foreclosure on our home as my wife has been laid off for a while. We have payments in arrears with an attorney, who helped us get a loan modification on our mortgage, but our home was destroyed in a fire and is now a total loss. We got a payment from the insurance company, so I would rather rebuild our home than walk away. My wife is starting another job in a month. Will the bank move forward with the foreclosure or allow us to rebuild our home?

Response: If you are not paying the mortgage, the bank may start a foreclosure action. You can try to get a loan modification to avoid foreclosure. However, if you now have the money to reinstate the loan (i.e. pay back the arrears and get current on the mortgage payment), the bank will be happy to get its money back. Once the loan is reinstated, you no longer in danger of foreclosure and I don't see a reason why you shouldn't be able to rebuild your home unless it is not feasible for you for some other reason.

In the legal blog, Attorney Svetlana Kaplun addresses typical questions our firm has received from our clients, or come across from homeowners related to foreclosure, foreclosure defense, loan modification and bankruptcy topics.

The information contained in the legal blog of Attorney Svetlana Kaplun is for informational purposes only, and should not be construed as a legal advice on any subject matter. Please read our full disclaimer or contact the Law Office of Svetlana Kaplun, P.C. by telephone at 718-444-1115 for more information.
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