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A Deeper Look at the Home Foreclosure Process
A Deeper Look at the Home Foreclosure Process
Foreclosure is a legal proceeding by which a lender can sell or repossess a home when the owner has stopped making payments. The steps which make up a foreclosure process can feel daunting. It helps to understand your personal rights through it all, along with the responsibilities as homeowner.
Stage One: Missed Payments
A homeowner must fall 90 days behind on a mortgage, in most states, before the mortgage lender can legally initiate the foreclosure process. This stage has to happen prior to the foreclosure starting and this is the phase which provides homeowners the most options. At the missed payment stage, the best time to rework your finances is right now. Call your lender to work out a compromise, put your home on the market and try to avoid immediate foreclosure.
Stage Two: Pre-Foreclosure
Once payments have not been made for at least 90 days, the lender records a public notice that the owner defaulted. This is followed by a mailed notice to the homeowner. In some states, this notice is called a Notice of Default (NOD). In others, it is a Lis Pendens. The lender may be required to post it to your front door. This 'grace period' provides a homeowner three calendar months to fix the default, which includes: making an arrangement with lender, selling, or coming up with cash to pay back the owed money.
Stage Three: Auction
If the default is not fixed within three months of the Notice of Default, the lender or a foreclosure trustee may set a date for the home to be sold at a sale ("Trustee Sale"). This includes:
- Notice record at County Recorder's Office
- Notice delivered to homeowner
- Notice posted on door of property
- Published notice in a local paper
Following these steps, a homeowner has the 'right to redemption," whereby he can come up with outstanding cash to stop the process or watch the home go to auction where it is sold to highest bidder.
Stage Four: Post-Foreclosure
If a third party has not purchased the property at auction, the lender takes ownership of it. This is now bank-owned property, known as REO (Real Estate Owned) by lender.
Up until the time of a home being scheduled for auction, most lenders would rather work out an agreement than let it go into foreclosure. There may still be time to save your home if you speak with your lender should difficulties making payments arise.
Choice Properties offers you a chance to find the home of your dreams. We work with your budget and ideas in mind to support your ultimate vision. Call us if you are ready to check out the available inventory or to speak with a reputable agent who can assist you with your home buying needs.