Please note the foreclosure process differs by state. If you are facing a potential foreclosure, it is important that you research your states laws and practices and become familiar with the different ways how to stop foreclosure.
A foreclosure occurs when a borrower cannot make principal or interest payments on a mortgage loan. This typically results in the lender seizing and selling the property.
The foreclosure process contains several stages during which the homeowner has an opportunity to bring the loan current and avoid foreclosure. It’s imperative to become educated on how to stop foreclosure.
After about three to six months of missed payments, the lender orders a trustee to record a Notice of Default (NOD) at the County Recorder’s Office. This puts the borrower on notice of the impending foreclosure and starts a reinstatement period. Please keep in mind you can still work out some type of loan modification at this time.
If the default isn’t corrected and the loan isn’t brought current within three months of the reinstatement period, a foreclosure sale date is established. The home owner receives a Notice of Sale which is posted on the property. This notice is also recorded at the County Recorder’s Office and published in the local newspaper.
The next step involves the foreclosure Trustee Sale with the time and location designated in the Notice of Sale. The opening bid is set by the foreclosing lender. It is usually equal to the outstanding loan balance, interest accrued and any other fees associated to the sale.
The highest bidder receives the trustee’s deed to the property. If there are no bids, the property is then purchased by the attorney conducting the sale on behalf of the lender. The property is then deemed an REO (Real Estate Owned). This typically occurs because many of the properties up for sale at foreclosure auctions are worth less than the total amount owed to the lender.
So what can a borrower do that is facing foreclosure or already in the foreclosure process?
Throughout the entire foreclosure process, while time passes, thousands of dollars in legal fees and penalties can be added to the amount owed by the borrower. Of course, every single day interest is added. We recommend contacting someone who knows the foreclosure process immediately, since time is your enemy. A loan modification can save a home from foreclosure.
Do your homework and learn how to stop foreclosure. There are many options available.
