How Does Foreclosure Work
How does foreclosure work?
Chances are that your curiosity about foreclosure means that you are either facing the idea of it in the near future, or foreclosure proceedings have already begun against your property.
If either is the case, then you are most likely feeling either fear, or dread, at what is to come. Foreclosure proceedings are actually simpler than most people believe, and usually involve just three major steps.
So how does foreclosure work?
1: Mortgage Lender Files a Notice of Default
Once the mortgage lender files a Notice of Default with the County Recorder's office for the county in which the property exists, you will have ninety days to either pay your past due amounts on your home loan(s), refinance your home loan(s), or enter some kind of credit counseling to make a repayment plan that both you and your mortgage lender(s) can agree upon. You can also sell the home in what is called a short sale, but that is a last resort, and should only be used as such.
2: County Recorder Issues a Notice of Sale
If after the ninety day grace period, nothing has changed regarding the loan or ownership of the house or loan, a Notice of Sale will be issued, notifying you of the date and time at which the home will be auctioned off publicly. You may still be able to save your home with quick action once your foreclosure proceedings get to this point.
3: Home is Auctioned at Public Auction
At the time and date specified on the Notice of Sale, the home will be auctioned off at a public auction. At most auctions, each bidder must pay a deposit up front to even bid, and the winning bidder must pay the remaining balance in cash within 24 hours of the time of sale.
If no one bids on the home, then the lender takes possession of the property and will usually try to sell it outright, or through another auction.
Foreclosure proceedings can seem rather difficult and complicated (no doubt they are scary for those property-owners affected) but nearly every foreclosure can be boiled down to these three major steps in the foreclosure proceedings.
Remember, it's usually not too late to save your home until just days before the home is auctioned off, so speak with a refinancing lender, a loan modification specialist, or a realtor before it really IS too late.
Now stop sitting around wondering "how does foreclosure work?" and get some help.
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