http://www.debts.org/index.php en info@debts.org Copyright 2008 2008-12-01T15:28:00+00:00 http://www.debts.org/11/index/the_foreclosure_process/ http://www.debts.org/11/index/the_foreclosure_process/#When:14:27:00Z Most people are familiar with the term ‘foreclosure’’, in fact the very mention of the word is giving many of today’s homeowners sleepless nights. Foreclosure is what happens when you are not able to pay your mortgage, which of course means you lose your home.So now you know what foreclosure is, but do you know what happens during the foreclosure process? Before we get to foreclosure however, we need to back up a little and start at the beginning. More... The foreclosure process is actually the last step of a long drawn out affair in which the lender tries to recoup their money. The first step is pre-closure.Pre-Foreclosure Step 1. When you miss the first payment you will receive a late payment notice from your lender. Step 2. If as homeowner you ignore the notice or default on another payment, a further payment request will be made by mail.Step 3. If at this stage you have still not contacted the lender, you may receive a demand for payment in full. This is when it gets more serious. In the content of your mortgage contract under the acceleration clause, the homeowner is responsible for the mortgage balance, late payments, legal fees and late penalties.Step 4. Once the acceleration clause has been evoked, the bank will not accept anything other than full payment and the formal foreclosure process begins.Step 5. You will be served a certified letter of foreclosure by a processor or the local sheriff. Step 6. A legal notice will be published in the local newspaper announcing the pending foreclosure (subject to local laws). As homeowner you can still try to work with the lender, but only if you are able to provide full payment.Court Date Once the court date has been set, you the homeowner, lender and any other party with financial interest in the property will be required to attend the hearing. The court will then issue the foreclosure to the lender who will publishes the note of foreclosure with auction date in the local paper. As homeowner you still have the opportunity to cooperate with the lender but only under their terms ie, you repay the entire loan.The AuctionThe auction also goes by the name of ‘sheriff’s sale’ or ‘foreclosure sale’. Any interested property buyer can participate in the auction but they must come prepared. To buy a foreclosure property the buyer must have a deposit check for the stipulated minimum and financing pre-established for the taking on of the property. At most auctions, the lender will bid enough to cover their remaining costs on the property, so unless the home owner has substantial equity in the house, the lender will normally win the auction. After the auction is closed, purchase contracts are issued between the auction winner and the mortgage lender. If, however, a party other than the lender is the highest bidder, a closing date will then be set.Money recouped from the auction is dispensed in order of priority, as follows:a) Real estate taxes owed, b) Mortgage, c) Liens and creditors who filed at the court hearing. The original home owner will receive any money remaining after the above have had their share. If there is not enough money from the auction to cover the mortgage, the original home owner is responsible for the difference - although it is now unsecured debt, since they no longer own the house. After the auction, there is normally a redemption period (which varies from state to state) during which the original owner can buy back the house if they can get financing. During this time, the home owner does not have to leave the house until the auction is finished and the closing has happened. If the home owner still has not left, then the new owner can file evictions. The process from pre-foreclosure to auction close is normally around six months. The Foreclosure Process 2008-07-11T14:27:00+00:00