Steps of Foreclosure begin when the lender is no longer willing to work with the property owner to bring the loan balance to current status. While there is no concrete law regarding the number of missed payments which must have occurred, some lenders are willing to delay longer than others hoping to avoid the cost, time and paperwork involved.
Although foreclosure allows the lender to claim title and force sale of the property based on loan default, there are foreclosure steps which must be followed
Default Notice requires the lender to inform the property owner by letter stating foreclosure is pending and must include the number of payments in arrears and balance owed. There is no requirement that this letter be sent be registered or certified mail.
The only option the borrower has at this point is to contact the lender in an attempt to bring the loan into current status. Unless being removed from layoff is imminent for the property owner, or the area real estate market is slow, steps of foreclosure will not of interest.
Acceleration Notice is required by law in most states. This documentation must clearly advise of mortgage termination and must offer a 30-day grace period for the total balance to be repaid. This communication may or may not include notice of intended legal action. While this notice may be sent by regular mail, in most cases it will be in the lender's interest to obtain signed proof of receipt of the letter.
Short Sale is an option lenders may use for steps of foreclosure. In this process, with the knowledge and consent of the lender, an investor or realtor may approach the lender offering to purchase the property. This offer will usually be very low or a rock-bottom figure but is of benefit to the lender and the investor since the property will not be exposed as a 'foreclosure'; thereby allowing the investor to profit from the resale and the lender not to incur additional expense.
Public Auction takes place on the courthouse steps of the town or county in which the property is located. The opening bid and bidding increments are at the lender's discretion with the opening bid usually set very low. The lender knows that if no bid occurs, the property title automatically reverts to him, and that the borrower now owes auction and attorney fees in addition to the balance.
Comments(0)