How Does Foreclosure Work?Home foreclosure processThe answer to the question 'How does foreclosure work?' may vary slightly from state to state, but the basics are generally the same. There is a clear pattern which must be followed, so if any of these steps are being skipped or jumped over by your lender, you should contact an attorney.Your lender or mortgage company does not really want to foreclose. It is expensive for them, and most lenders are happy to try and work out some sort of way for you to keep out of foreclosure and stop the repossession of your home. The best way for you to stop foreclosure is to keep the process from being started in the first place; so even if you are not behind on your loan it is a good idea to open communication if you start to fear you will begin to make payments. If you do start receiving notices, you can still stop foreclosure, but it can be harder the longer you wait. Understanding the process is a good place to start if you think you may have to deal with foreclosure.In many cases, simply missing one payment can cause the preliminary home foreclosure process to begin. You will typically receive one or more letters from the mortgage company informing you that they have not yet received your payment and that it must be made immediately. If you continue to miss payments for two to three months, you will continue to receive such letters, with the amount you owe mounting as late charges, interest and other fees are tacked on. Once sixty days have passed, you may receive a 'notice to accelerate' from your lender, demanding that payment be remitted to bring your loan current. By this time, any hope of having a partial payment accepted has pretty much disappeared - they will demand that you pay the entire delinquent amount including additional fees. Threats may be made indicating that they have the right to accelerate the due date of the entire loan and initiate foreclosure, and that they may also be adding attorney fees to the total amount due. Of course, hardly anyone will have the means to pay off their entire mortgage balance, so most people assume if it reaches this stage that the matter is hopeless - but as long as the home has not been physically repossessed and resold, there is hope. The next step is the demand letter - if you don't make the payment demanded by the due date listed on the notice to accelerate, the mortgage company will enlist an attorney to forward a formal notice to you. This notice is referred to as a demand letter and states that if the loan is not immediately brought current that the foreclosure will be filed with the court system. If no response is made to the demand letter, the attorney will notify the mortgage company that they may proceed with the foreclosure and the notice of default will then be formally filed with the court. You will receive a formal document from the court itself telling you that you are in default and stating the total debt amount that you owe (the total mortgage balance, plus extra fees, accumulated interest, and attorney costs). You will be allowed twenty to thirty days to respond to the notice of default. If you do not respond before this time period elapses, the attorney may move ahead and file the notice of sale. A sheriff's auction date will be set, at which time your house will be sold at auction. At any time during the foreclosure process before the date of the sheriffs sale date, you can stop the foreclosure process or postpone it by responding and requesting a plan to be set up for you to regain control of your mortgage situation. You should consult an attorney, especially if you are being told that no-one can help you. Hopefully now the question of 'How does foreclosure work?' has been answered for you, and you know what to do next!
Mortgage loan modification assistance
Commercial loan modification help
Learn about the California foreclosure process
Home from how does foreclosure work
Going to federal loan modification from how does foreclosure work
|
