How Does Foreclosure Work?
” by distressed homeowners. They want to know whether they can save their home and what to do if they can’t. So, when people ask me how does foreclosure work, I let them know that it’s a process – a legal process. The lender has to go through a series of steps to make the foreclosure legitimate in the eyes of the law. First comes the Notice of Default which puts you and the system on notice that the lender is proceeding against you. The lender must serve this paper on you. Depending on the state, they may be able to mail it to you. This starts the clock ticking for saving the house. You may have weeks or you may have a few months – depending on the state.
What is a Mortgage Foreclosure? How Does Mortgage Foreclosure Work? What is a Mortgage Foreclosure? When most people purchase real property, they do not have enough money to simply purchase the property outright. In order to make the purchase, they are required to borrow money from a lender. In exchange for lending the money, the lender will hold a lien against the property. If the borrower does not make the required payments, then the loan goes into default and the lender can exercise the lien against the property, in order to take legal possession of the property for the purpose of selling the property to pay off the borrower’s loan. This process is called mortgage foreclosure. How Does Mortgage Foreclosure Work? The first step in the mortgage foreclosure process is that the loan becomes delinquent because the borrower has not made a required payment or payments. When the loan becomes delinquent, the borrower goes into what is called default. Often, the loan will remain in default st
Per the standard deed of trust, this is what most borrowers signed. The payment is late on the 2nd of the month. There is a 15 day grace period and then a late fee is assessed. After 25 days, lenders have a right to make sure you didn’t abandon the property and secure it if you did. After 45 days a 45 day notice is sent. The letter basically states you have 45 days to pay ALL the money you owe or they have the right to file for an attorney. The process varies after that based on state/county/city laws, workload of the attorneys and title issues. Once all the legal stuff is cleared a sale date is established. You either come to an agreement with the lender at that point or your property is typically auctioned off at the county steps the morning of the sale date. At that time, your county Sheriff will deliver instructions for eviction. It can sometimes take months, sometimes years.
