About Foreclosure
What is foreclosure?
Foreclosure is a legal action used by a mortgage company to recover any money from a customer when the customer does not pay his or her debt in accordance with their mortgage agreement. In other words, it's the legal remedy used by a mortgage company to assume ownership of a property when the required loan payments are not made. Foreclosure obliterates otherwise good credit.
How does foreclosure happen?
Although the actual process varies from state to state, foreclosure revolves around a homeowner's inability to keep up with monthly mortgage payments. The farther behind the homeowner gets, the closer to foreclosure the homeowner becomes.
What happens in a foreclosure process?
State laws vary greatly, but the foreclosure process generally involves:
- The lender giving you a written notice of default, which will likely come by certified mail
- Being given a period of time after proper notice to pay the lender the amount required to cure the default and to reinstate your loan
- The lender electing to proceed with foreclosure under available remedies, which may include pursuing a judicial foreclosure by filing a lawsuit to obtain a court order to sell the property or pursuing a non-judicial foreclosure by following procedures spelled out in your mortgage (or deed of trust) that allow a trustee to foreclose on and sell your property, without a court order
- the required time has elapsed, being given a notice of foreclosure sale
- A public sale held by auction where the highest bidder can buy your property, and
- If no one bids enough, the lender buying the property by submitting a credit bid based on the amount you own on your mortgage
- If the lender ends up with the property, it being sold by private sale at a later date
- If you have not vacated the property by the time of the foreclosure sale, an unlawful detainer lawsuit being filed to evict you
It is important to know that at any point during these proceedings, you are usually in the position to keep your home if you pay off the loan and pay for foreclosure costs. However, you have to be realistic in assessing your options.
Is anyone exempt from foreclosure?
No. Everyone with a mortgage is subject to foreclosure, should non-payment become an issue.
What should you do?
Whether you're in foreclosure now or worried about it in the future, we have information that can help. No matter what your financial situation, please don’t hesitate to call the Homeowner’s Hope Hotline, 888-995-HOPE™. We can help.
Don’t assume that your mortgage problem will quickly correct itself. Don't lose valuable time by being overly optimistic. Contact your mortgage lender to discuss your circumstances as soon as you realize that you are unable to make your payments. While there is no guarantee that any particular relief will be given, most lenders are willing to explore every possible option.
