The Foreclosure Process
A foreclosure occurs when a homeowner is unable keep up with
his mortgage payments, interest payments, or property taxes, typically leading
to the property either being sold or seized. However, the foreclosure laws vary
from state to state and the process also differs in a few circumstances. Here
is a general overview of the foreclosure process:
The Process
Foreclosure proceedings can sometimes begin after a single
missed payment. However, most lenders and banks have a grace period for late
payments, but usually with an extra fee. On the first missed payment, you might
just get a phone call from your lender. But after the second missed payment,
you will be getting many phone calls, both from your lender and the bank.
Therefore, the lender will demand that you make the late
payments urgently to bring the loan current. If you are unable to pay the
amount and fall three months behind, things will get serious, and your lender
may file a lawsuit against you. This is where the foreclosure process begins.
Your lender may begin the foreclosure process in one of three ways, i.e.
judicial foreclosure, power of sale, or strict foreclosure. Let’s take a look
at all three of these foreclosure methods.
Judicial Foreclosure
Judicial foreclosure, also known as judicial sale, is the
process in which the lender will file a suit against the delinquent and you
will receive a letter from the court demanding payment. You will have 30 days
to respond with a payment if you want to avoid foreclosure. However, if the
payment is not made within due time, a judgment will be entered and the lender
will request for the short sale of your property through an auction to the
highest bidder. Once your property is sold, you will receive an eviction
letter, and you will have to vacate the premises in the given time.
Power of Sale
Power of sale foreclosure, also known as statutory
foreclosure, is the process in which the lender sends letters demanding
payments when you have defaulted. After an established waiting period has
passed, a deed of trust is drawn up, which temporarily conveys the property to
a trustee. This trustee is then responsible for the property and carries out a
public auction.
Oftentimes, these foreclosures are subject to a judicial
review to ensure everything is carried out legally. If not, and you have any
complaints regarding the judicial reviews, you can contact a professional
attorney. However, in this type of foreclosure, there is a requirement that the
lender posts a public note on the sale of the property through auction.
Strict Foreclosure
In these foreclosure proceedings, the lender will file a
lawsuit against the homeowner who has defaulted on his monthly payments. If you
are unable to pay the monthly mortgage within a specific time period as ordered
by the court, your property goes back to the mortgage holder. However, this
type of foreclosures is rare and only occurs when the amount owed to the
mortgage holder is greater than the value of the property.
As you can see, things can get quite complicated when it
comes to foreclosures. If you find it difficult to understand the
technicalities of the process, the best option is to either contact Litvin Law
Firm, or hire Gennady Litvin, a lawyer who concentrates on foreclosure. This
ensures you get your due rights and have the best chance of saving your
property.
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