What is the Foreclosure Process ?
A foreclosure process usually occurs when your property or the owner of the property cannot make principal and interest on his or her loan typically leading to the property being seized or being sold by the company that gave you the loan. In most cases if it is the banks that offer the loans and if the loans are not paid in due time the bank has the right to take the property that the money they lend bought. When taking a loan from a bank it is normal that you state the reason as to why you are taking the loan in the first place.
It is not difficult to understand a foreclosure process since it is something that you are taken through before anything else. Well, there are some states where people get into great problems because they are not able to pay the loans they have accumulated. There is a way a home owner can keep off a foreclosure process or he or she can avoid a foreclosure process by paying the dues in time. It works in a way that after three to six months of no payment, the borrower of money can order the trustee to record a notice of default payment at the office of the recorder.
What are the Foreclosure Consequences
The first time you miss making a regular monthly payment is quite possibly the start of the foreclosure process for many people and your lender may firstly contact you by telephone and will almost certainly send you a letter. What follows is the process itself so that you may understand this situation a little clearer. In order to receive further foreclosure help you may wish to speak with a housing counselor.
Second Missed Payment
Once you miss making a second monthly payment you shall again be contacted by your lender who shall make inquiries as to why you have not paid. It is at this stage very important to speak with your lender when they call and for you to explain your situation. You may at this stage of the foreclosure process make a monthly payment if you are able to so as not to miss a third month. Again it is always wise to involve a housing counselor to help you.
Third Missed Payment
Once you have missed a third month your lender will have sent you a Demand letter also known as a notice, this notice states the amount due which you need to pay. You are allowed a period of 30 days to bring your account up to date. Not making that payment on or before the due date will allow your lender to start the foreclosure process. Its most important to remember you still have the chance to negotiate and to come to an arrangement with your lender in order to stop foreclosure.
Fourth Missed Payment
By this time your 30 day notice period shall be coming to an end, once that period has ended without you paying the amount required or having come to an arrangement with your lender, is when their attorneys shall become involved. You shall also be responsible for the attorneys fees throughout the foreclosure process. Involving a housing counselor is highly recommended at this point. The lenders attorneys will schedule a Sheriffs or Public Trustee’s sale, this is known as the actual day of foreclosure and means you shall soon be needing to move out of your home. Between the period of demand letter and the day of the sale you still have a chance to stop foreclosure by discussing the situation with your lender and coming to an arrangement to clear the amount which shall now also include the attorneys fees.
After the sale of your home
This part of the process is known as the redemption period and you shall be given the chance to reclaim your home even if it has been sold through a foreclosure sale. To do this you would need to pay the total costs and fees up to this point in the process. Please note, this redemption period can vary depending on the type of foreclosure ie, judicial or non-judicial.
Communication
Lenders on the whole are not in the business of foreclosing on peoples homes it is the last resort for them. Communicating with your lender can make all the difference to the foreclosure process and communication with your lender particularly in the early stages is most important if you want to stop foreclosure by coming to an agreeable solution. Finally, all time periods and dates are an estimation as this depends on your state and the lending institution.
Other Foreclosure Process Info
When this takes place, the borrower of the money will be on notice that he/she is likely to go through a foreclosure process. When this happens, the borrower is sometime left to clear up his bill or find an alternative way to find payment dues before the house is taken away to recover the loans. This is when the reinstatement period begins and it goes on for five days before the moneylenders auction the house. The best thing one can do to avoid all these embarrassment is to start planning early; as early as you take the loans even.
You can avoid a foreclosure process when you get proper advice from an intellectual. You can still get credit settlements from credit settlement companies when you think the situation is going to be hard for you to handle. A foreclosure process takes up to thirty days from the day of notice of default. This is the period called the reinstatement period and it allows you to find out the best ways to avoid loosing your house through auctioning.
When you buy a house through a foreclosure process all the other minor liens that are not taxed are wiped out from the foreclosure process. In addition, if the default is not paid within the first three months it is possible for a foreclosure to take place. In case the opening bid is not met, this property will be termed as a real estate. This may sound complicated but it is something you should familiarize with to be able to avoid future embarrassments. In addition, before taking a loan to erect a building or an estate it is good to learn some of these terms too, this way you will stay alert.