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Mortgage
Foreclosure
As soon as a person misses even
one mortgage payment, the bank will be
aware of it and they will begin the very
early stages of the process. In the
beginning, they will try to work with
the home owner to get the missed payment
or payments paid. The first letter in
this process may arrive as soon as 2
weeks after the first missed payment was
due.
The process of mortgage foreclosure
has a set procedure which depends on the
laws of the state or jurisdiction that
you live in. These laws do vary a little
bit from state to state. However, most
of them follow a certain process that
you will see below.
In case you do not already know,
foreclosure is what happens when a
person cannot pay their mortgage or
other home loan. In the loan agreement,
the bank always has the right to take
possession of the house if the loan is
not paid. Then they will sell it to make
back the money that is owed to them.
Because they have the house as security
for the loan, they can offer lower
interest rates on a mortgage than on an
unsecured loan.
As soon as a person misses even one
mortgage payment, the bank will be aware
of it and they will begin the very early
stages of the process. In the beginning,
they will try to work with the home
owner to get the missed payment or
payments paid. The first letter in this
process may arrive as soon as 2 weeks
after the first missed payment was due.
After a person has missed payments for
three months or more, the bank will have
a lawyer file a Notice Of Default (NOD)
at the County Recorder's office. This is
the official notice to the person that
they are facing foreclosure proceedings
and will lose their home if matters are
not put right. Some lenders file this
immediately at the minimum 90 days.
Others wait longer, sometimes up to a
year.
If the debt is not settled or payments
agreed to the satisfaction of the lender
within 90 days of the Notice Of Default,
then a second notice giving a date for
the sale will be sent. The sale is
usually 15 to 30 days from the date of
this second notice.
The sale notice will be filed with the
County Recorder, posted on the property
and published in the local newspapers.
The sale is usually by auction in a
Trustee Sale.
The sale itself is normally held on the
steps of the courthouse in the county
where the house is located. The auction
will be held and the winning bidder must
pay in cash. Usually, they pay a deposit
right there at the auction and then the
rest is due within 24 hours.
The starting price is set by the lender
and usually it will be the total amount
of the debt including all the interest
that is due and the legal fees from the
foreclosure process. So in some cases
the price starts low and there may be a
lot of bidders. In other cases if the
price is high there may be nobody
bidding. In this case the lawyers will
usually take the property.
So there is a set procedure that is
followed in each state and it is always
possible to get an explanation of it
from a lender. It should not be hard to
understand. Foreclosure is a long drawn
out process and most banks prefer to
work with a home owner to get a payment
plan set up if possible. Mortgage
foreclosure is a last step that both
sides usually want to avoid if they can.
Related Articles:
Avoid Foreclosure
How To Prevent
Foreclosure on Your Home
Mortgage
Foreclosure
Take Action Early
to Avoid Foreclosure
Tips to Avoid
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