In our last post we discussed what a foreclosure is and how it can potentially uproot your life. In this post we will look more in depth at the process of a home being foreclosed on and what those who are being threatened with a foreclosure should expect. Keep in mind while reading that there are plenty of opportunities for the borrower to reclaim their property throughout the process and the beginning of the foreclosure does not guarantee that it must continue.

  1. Payments are not madedreamstime_l_6309401
    Foreclosures vary depending on which state you live in but for the most part, this stage is the same. When a borrowing party fails to make payments on their mortgage, there can be many things that contribute to it. Often personal issues such as divorce, a death in the family, unemployment or medical issues lead to late or no payments at all. Another reason someone may stop paying on their mortgage could be they do so intentionally. This most often is due to a mortgage exceeding the value of the home, should the home be damaged by something out of the borrower’s hands. Other times the borrower is simply tired of taking care of the property and decides to simply stop pay the money he/she owes.
  2. Receive a public notice
    The most common amount of time it takes for a lender to reports that payments are no longer being made is three to six months. When this amount of time had passed the borrower will likely be made aware that they are in jeopardy of losing their home or may even be evicted depending on the amount of time that has passed since the last payment.
  3. Pre-foreclosure
    This period of time, normally lasting anywhere from 30 to 120 days is the very last chance the borrower has a chance to regain custody of their home. This time allows for the borrower to either work out some kind of agreement with lender or to pay the total outstanding amount that is owed on the property.However, if nothing is resolved, the foreclosure will continue.
  4. The auction
    Once the pre-foreclosure period ends and payment still has not been made by the deadline, the lender will set a date for the home to be auctioned off. Some states allow for the borrower the reclaim their property with a “right of redemption” which allows them to come up with the money owed up to the moment before the home is auctioned off to someone else.
  5. Post-foreclosure
    If for some reason, the home is not auctioned off to a third party, the lender then takes ownership of the property until it can be sold or rented by a real estate agent.

Foreclosures are long and drawn out processes that can be a pain for all those involved. If you have questions or concerns about a foreclosure you may be involved with, call Pavithran Law today and let us setup and appointment to help you get the answers you may be searching for.