What is foreclosure?
Foreclosure process begins when the owner of a real estate property has stop in paying their mortgages or whose owners are late in paying their loans. When this occurs, the lender or the bank will now file a foreclosure notice. This foreclosure notice is a legal document that lets you know that the bank has initiated a foreclosure proceeding. Foreclosure differs in every state, so let’s just focus on the general steps that are taken.
When you received a foreclosure notice it doesn’t mean that you are going to lose your home right away. Foreclosure notice is the first step of the foreclosure process that may take weeks or months to untold. There will be several stages in which you can have the opportunity pay for your loans and to avoid foreclosure. So it is very important to stay in contact with your lender whining the first month after you’ve missed a payment in order to gain control of the outcome.
In general most banks or lenders are giving the borrower a grace period for late payments usually with a fee added on the loan. If within 30 days the borrower was not able to pay for his or her mortgage then that’s the time the foreclosure process begin to hasten. After you’ve missed the second payment a phone call will be initiated. In most cases the lender or the bank will not accept partial payments they will only accept both late payments in order to bring the loan current. So it is very important that you cooperate with your lender and don’t ignore their calls in order to give you some advice or alternatives on what to do with your loans and to slow down the foreclosure process.
If within 90 days the homeowner was not able to pay for his or her loan the lender will send a notice of default (NOD). If in case the homeowner was not able to cure the default a foreclosure date is established. The homeowner now is going to receive a Notice of Sale and this notice will be posted on the property as well. Then it will be recorded at the Country Recorder’s Office where the property is located. The homeowner will also receive a copy of complaint and summons. When this happens, you should contact an attorney right away. You are given 28 days to answer the summons, you’re mortgage lender may grant you an extension to work on a resolution. If you fail to answer or were not able to reach a resolution the lender will proceed immediately to summary judgement. Once the court grants the motion, your lender will now contact the local Sheriff’s office to schedule the sale.
At the auction, the opening bid is set by the lender and the home is sold to the highest bidder. If the property was not sold in an auction the lender takes possession of it. Then the property becomes an REO property, Real Estate Owned.