Foreclosure Procedure ? An Overview
Each foreclosure procedure is governed by laws of the state. Different states can apply different procedures. The foreclosure procedure gets underway the moment a property owner fails to make good on the principal and interest payments on his house. Part of the foreclosure procedure is seizure and sale of the property.
Foreclosure Procedure - The Flow
How does a person get trapped in the foreclosure procedure spiral? The moment a mortgage loan payment is 16 days late, full-blown foreclosure procedure is just around the corner. At this point, the mortgage service provider will attempt to get in touch with the delinquent homeowner to work out some kind of repayment scheme to make the loans current.
After three to six months of missed loan payments, lenders order a trustee to draft and record a Notice of Default or NOD at the Office of the County Recorder. The NOD serves to put borrowers on notice that they’re facing foreclosure procedure actions. It also sets off a reinstatement period that ordinarily runs for five days before the property gets auctioned off.
Defaults that aren’t corrected within 90 days result in foreclosure procedure sale dates being established. Homeowners get a Notice of Sale. The same notice will get posted on the house or property. It’ll also be recorded at the Office of the County Recorder in the same county where the home is located. The sale notice is likewise published in local newspapers in the area for three weeks.
Foreclosure procedure trustee sales ordinarily occur at the county courthouse steps where the property is situated. Sale location and time are specified in the sale notice. Properties are held in public auctions at Trustee Sales and awarded to the highest bidders. The winning bidders pay in cash, usually with an initial deposit upfront and the rest within the next 24 hours.
At property auctions, the opening bids are set by the foreclosure procedure pushers – the lenders. Opening bids are generally equal to the outstanding mortgage balance, built-up interest, plus any extra fees and attorney charges relating to the Trustee Sales. Should there be no bids exceeding the opening bid, the next foreclosure procedure is having the property purchased by the lawyers running the sale for the lenders.
The foreclosure procedure is pretty straightforward. It’s not hard to understand how the whole foreclosure procedure thing works. The bottom line is - homeowners are always given some “wiggle room” to bring their mortgage loans current and avoid total foreclosure procedure. If they still fail to come up with a payment plan, initiation of foreclosure procedure actions is what follows next.
By Real Estate Editor
