The Process Of Mortgage Foreclosure
Sometimes in life you might find yourself in situations where you wish you had never gotten yourself into
. But there are times when you may have no control over things in your life that you end up in such situations by no fault of yours. For example you might think that you are secured for life with a full-time job and steady income until your world suddenly comes tumbling down as you lose your job because your company might be down-sizing. Without regular paychecks coming in, you may find yourself having trouble keeping up with all your debts including your mortgage. As you keep missing due payments, your bank or lender may finally decide to impose
mortgage foreclosure on your home.
Generally a
mortgage foreclosure means your lender or mortgage provider is exercising their rights over your property because you have continuously failed to make all due payments. Basically they are taking over your home. However it does not necessarily mean that your bank or lender may simply come to your house and force you to vacate your home immediately. The procedure of foreclosing your home may take quite some time and the cost of doing so is generally high. This is why even banks or lenders avoid having to foreclose any property at all unless they are left with no choice but to do so. Eventually you may have to move out of your home but your bank may be required to follow certain procedures and you may have to follow this procedure as well for foreclosing purposes and then go through a different set of procedure for the eviction.
The
foreclosure process does not generally start immediately with repossessing your home. At first, your bank might still try to make you pay your monthly dues by accelerating your loan. After all, they probably dislike foreclosures as much as you do. Many home loans nowadays include a provision that allows your lender to accelerate the loan should you default on the terms of the loan. Basically if you continue to be late in your payments by 60 days or more, your bank may exercise their rights to demand that you pay the entire amount of your loan in one lump sum. They usually send a written notice of acceleration to inform you of such instances. Should you ignore the notice, your bank may then proceed to write to you a demand letter stating that if the loan is not brought current immediately your lender might begin the foreclosing process.
If they do not receive any reply to their demand letter within a specific period of time, they may proceed to file a notice of default with the court to inform them of your lenders grievance against you along with the intention of taking ownership of and selling your home. You might want to bear in mind that all legal costs of filing notices and legal letters are to be borne by you, therefore adding more debt on top of the amount you already owe your lender. Once the notice of default is filed, your lender may then exercise their rights over your home and a series of foreclosing activities would take place. You may want to take note that different states have different foreclosing procedures so depending on the location of your home the foreclosing procedure might take at least two months to complete. You may receive a notice of sale from your lender stating their intention and right to sell your home at auction, in which case, you may be required to clear out the contents of your home usually at least 10 days before the auction date.
Foreclosure is no fun for you or your lender. Your bank may not benefit much from it and you may have damaged your credit rating for at least seven years. So it is usually for the benefit of both parties that you and your bank work together to avoid having to foreclose your property as a result of you defaulting on your payments.
by: Ask Bill
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