When a borrower or defaulter fails to make settlements and defaults on loan payments, the usurer or lender has the rights to file a public default notice.
This marks the beginning of the foreclosure process. The public default notice is also known as Lis Pendens (suit pending) or a Notice of Default.
The other side of the coin of course is how to stop foreclsoures. There are four main different ways to stop the foreclosure process:
- The borrower or defaulter pays off the amount of the default during the grace period or pre-foreclosure period. By doing so, the borrower or defaulter recommences the loan.
- During the pre-foreclosure or grace period, the borrower or defaulter is allowed to sell off the property to a third party. The proceeds from the sale could be used to pay the usurer or lender’s loan. The borrower or defaulter will not have foreclosure on their credit history.
- At the end of the pre-foreclosure or grace period, the property could be put up in an auction. If it is sold to third party, the proceeds will go to the usurer or lender. This would instate a foreclosure record on the borrower’s or defaulter’s credit history.
- The usurer or lender repossesses ownership of the property, with means to re-sell it. There are two ways for the usurer or lender to take ownership of the property, either by making an agreement with the borrower or defaulter, or by purchasing the property back at the public auction.
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