The Mortgage Foreclosure Process
July 14th, 2009
The most common questions about foreclosure is about the actual mortgage foreclosure process. Most people have a mortgage or even mortgages when they are in foreclosure. Knowing what the mortgage foreclosure process is will give help you avoid or stop foreclosure.
Bear in mind, though, that the mortgage foreclosure process explained below is a general process. While the mortgage foreclosure process below hold true for most states, there are states that use different foreclosure processes. We will start explaining the mortgage foreclosure process from the time the Foreclosure Notice is filed.
Notice of foreclosure and Notice of Trustee’s Sale
Usually about 3-4 months after you missed your mortgage payment and have failed to pay or negotiate with the lender, you will receive the Notice of Foreclosure and the Notice of Trustee’s Sale. These notices officially start the mortgage foreclosure process and are mailed to you by certified, return receipt requested, or they can be ‘served’ to you.
Advertising of your foreclosed property
Before your home is sold in a Trustee’s Sale, the lender or the firm paid to foreclose is required to advertise the property for a minimum number of days such as 20 days. After your foreclosure is published, you will see many real estate investors driving by to see if they want to buy your foreclosure home.
You will get lots of people interested in buying your home for cheap coming by to see prior to the auction. If you don’t want your home sold cheap at a foreclosure auction, you have a choice to do something about it. See I Had to Move from My Home to Avoid Foreclosure. Alternatively, you can get a free foreclosure consultation to find out once and for all what
your options are.
Opportunity to pay off your mortgage
Before the foreclosure home actually go on sale at a foreclosure auction, the lender will give you the last chance to pay back your loan in full. However, this is usually not an option for most people. Not only you have to pay your mortgage balance in full, you will have to pay any additional fees the lender decides to slap on top of what you owe such as interests and penalties, attorney fees and back
payments. The lender may be willing to still negotiate at this point but they are usually past the point where they would accept lower payments.
Trustee’s Sale
If you have not come up with all the payments required then the lender will auction off your foreclosed home to the highest bidder at the auction. The price that your foreclosure home is auctioned off will be significantly lower than the market value of the home. This is why you should try to sell your home before it goes to foreclosure. In some states, the lender can even bill you or sue you for the difference between the amount you owe and the amount that was collected at the auction. So, if you think you can walk away from the foreclosure situation free and clear, think again!
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