Foreclosures Explained
Ever wonder what exactly a foreclosure is? Having second thoughts about purchasing a foreclosed property? Foreclosed properties can be a great opportunity for investment so it is important not to count them out just because it is venturing into something you don't know alot about. Here is the basics of the foreclosure process...
A mortgage foreclosure happens when a lender exercises its lien against a borrower’s home in order to sell the house to pay off the mortgage loan. This only happens after the borrower has failed to make mortgage payments for a period of time. After the owner is given the legal allotted time to make payments a notice of default is recorded by the bank. This happens after they’ve missed a payment, or sometimes up to four payments. Next the owner is given an opportunity to reinstate the loan. Bring his or her loan payments current plus the late fees and whatever penalties are assessed, and they have just reinstated your loan. They’ve stopped the foreclosure. If payment is not brought current a date of foreclosure is set by the bank. Typically, the date is three months (about 90 days) after the bank sets the notice of default. Individuals are allowed to live in the house until the actual date of foreclosure. Next a notice of trustee sale is prepared, published and posted. The bank will publish the notice (you’ve seen those notices in your local newspaper), mail the owner a copy and post it on the outside of the house. Last the house is sold at a foreclosure auction. If previous owner are still living in the house and it is sold at auction, the new owner can have the sheriff evict them within 24 hours. The important thing to remember is the foreclosure process is lengthy with the parties in default given ample warning to correct the situation by either payment or short sale.. Just know that if you fall behind there are multiple opportunities to save your home or on the flip side if you purchase a foreclosed home you are not buying it out from some unsuspecting person. If you have more questions please feel free to email me! Have a great week!