Owning a home is a dream for so many people, but it also comes with quite a few responsibilities. If you are no longer able to make payments on your mortgage, you will face the foreclosure process.
There are numerous steps in this process, and it is crucial that homeowners understand what each entails. Keep in mind, there are lots of opportunities to stop the foreclosure as it progresses, which can help you keep the home you worked so hard for.
Defaulting on the loan
Most homeowners have a grace period after the first missed payment. If you continue to miss payments, the loan will eventually end up in default. The timespan of missed payments can range from 30 days or more depending on the lender, at which point they will begin to take foreclosure actions.
Receiving notice of default
There are judicial and non-judicial foreclosures. With judicial types, the lender files a lawsuit against you, which may result in a hearing. With non-judicial foreclosures, the lender provides you a notice of default while also publishing the notice for public record. After receiving this notice, you will have 90 days to make up any missed payments.
Creating notice of sale
If you cannot make up the missed payments during the time period afforded by the lender, they will arrange a home sale. In many cases, a home auction takes place where bidders can make offers on the property. When the sale takes place, the current homeowner must vacate the property in the time provided, which usually ranges from a few days to a few weeks.
It is best to contact your lender as soon as possible when financial problems arise. Many are willing to work with homeowners to help them remain in the property, provided they give ample notice and develop a plan of attack before any missed payments occur.