The mortgage foreclosure process is different from the tax foreclosure process but is the more common one. When people are in foreclosure because they fail to pay their mortgage payments, the bank will foreclose on their home and the mortgage foreclosure process will begin.
Different states have different rules for the mortgage foreclosure process. Lenders have to follow the rules when filing foreclosure on homes. Some states have more rules to follow than others but most of them have the same basic mortgage foreclosure process.
For the people in foreclosure, the mortgage foreclosure process usually starts with them missing monthly payments. The lenders usually don’t threaten foreclosure until three payments have been missed. The mortgage account is considered in default at this point.
When the account is in default, the next step of the mortgage foreclosure process is the notice of default. The homeowner is not in foreclosure yet but the notice of default is the first real evidence of the mortgage foreclosure process.
About three months into the mortgage foreclosure process, if a payment plan cannot be reached between the lender and the homeowner, then the lender will send a notice of foreclosure and perhaps also the notice of trustee’s sale depending on state law. These notices are often served to the homeowner by certified mail or in person by the Sheriff. Public notices are also posted and you will get calls and people coming by trying to see if your home would be a good investment.
It is also not strange for a lender to post a sign outside a foreclosure home. This is the most embarrassing step of the mortgage foreclosure process for the homeowner because anyone can now see that the home is being foreclosed on. There may be many people driving by the home to see if is is a good investment property for them to bid on at the foreclosure auction sale.
Before the auction date or the date of foreclosure sale, the homeowner can still pay off the mortgage balance in full and the mortgage foreclosure process will cease. But, most people cannot find enough money to pay off the mortgage balance. Sometimes, there are loans to stop foreclosure but they are rare nowadays. The last chance the homeowner has to get the home back is about six days before the sale.
The foreclosure auction is the last step of the mortgage foreclosure process and it is when the lender auctions off the foreclosed property to the highest bidder. Some of the bidders are new homeowners looking to buy cheap homes or real estate investors looking to buy cheap investment homes. The auction price is usually low, sometimes much lower than the market value of the home.
1 comments:
As you said, foreclosure is a serious situation that has serious repercussions. One should avoid a foreclosure as much as possible. If one is on the verge of getting his home reposed by the bank, its better seek help from any reputed debt relief companies like Bills.com. Because these companies may can help people with a lot of other options.
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