What To Expect During Foreclosure

[Jun 13, 2008.]

 

Foreclosure is a word known by all and feared by many. If you are a home owner you no doubt know what it takes to go into foreclosure but how much about that process do you really know?

The housing market is showing some signs of repair, but these signs are often isolated and small not encouraging any optimism from the financial experts and certainly not among those home owners who live in fear of foreclosure.

While foreclosures are different for each homeowner, due to the difference in property and local laws, the general actions are basically the same.

It all starts with the defaulting of payments. Defaulting is when the homeowner is unable to make a payment which prompts the lender or the bank to begin the entire foreclosure process. Some lenders may start the process after only one missed payment, while others will be more lenient and allow a few months to pass. These lenders will usually ask for some kind of notice and may require you to come up with a new payment plan.

However, if you are still unable to make the payments then the bank will proceed. For the most part, the first half of the foreclosure process will take place through the mail and with notifications.

The bank or lender will mail you intent of foreclosure. Usually this notice will come certified mail to insure that the intended recipient receives the letter. Once you receive this notice the lender will start the actual process of foreclosure. The notice of intent is not meant to serve as a discouraging tactic but to allow you to spring into action if you have not done so already. Public notices of the foreclosure are placed in the local newspaper. This is required by law and is rather embarrassing for the parties involved. If you were putting off telling anyone about your financial hardships, now is probably the time to spill the beans and maybe even ask for help.

Now, you can stop the process by paying the entire amount of the mortgage. If however, you can not then the process enters court. When the foreclosure is deemed as justified the judge will order the foreclosure and issue appropriate dates for the auction of the home.

The auction will be a public auction so anyone can participate. The auction is meant to recover the lender’s losses. If the equity in the home is more then the auction price it is possible for the home owner to get some, not much but some, of the money invested in the home back.

The former home owner might be able to stay in the property until the closing date from the sale is set. However, this might not be for the best. If you realize that you will not be able to save the property from foreclosure it is important to make other plans and find somewhere else to live. This fact is painful but necessary.

The foreclosure process is complicated so consulting with an expert is advisable. If you fear that you are in trouble of defaulting on a payment do not sit around and wait, instead discuss possible option with your bank or lender. It is important to be proactive and act fast when dealing with foreclosure