Understanding A Foreclosure
A foreclosure is when a lending entity takes ownership of a property with the intention of selling it at an auction to recover the owed loan amount. This happens when the homeowner or property owner fails to meet their monthly mortgage obligations over an extended period of time. A foreclosure is a lengthy and expensive process that should be avoided at all costs. Homeowners in a financial crisis should consider seeking loan modification services to avoid it.
Your home is not eligible for a foreclosure if you have defaulted on only one month’s of loan amount. The law stipulates that a homeowner has to default for more than 30 days before the foreclosure proceedings can be commenced. Additionally, the lender will attempt using various means to get you back on track with your payments before commencing a foreclosure process.
If the default is not remedied and the payment is not resumed, the lender will issue a breach letter to inform you of the impending consequences. This letter will also urge you to discuss with the lender to avoid the situation, formally known as a foreclosure workout.
If no solution is gotten within 45 days then a petition to a foreclose on the mortgage might be filed. The court will issue a notice of default (NOD) indicating that a foreclosure process has been initiated. A 30-to 60-day grace period will be issued for you to remedy the situation.
The homeowner may seek an audience with the relevant professionals to see what options they have. There are a variety of options a homeowner can pursue to delay or stop the foreclosure process, including loan modification, forbearance negotiations, filing for bankruptcy or initiating a short sale. If no action is taken by the homeowner within the grace period , the home might be sold at auction.