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Stages of Foreclosure, Part 1

The word "foreclosure" has been a hot-button topic around the real estate industry for the past few years -- but exactly is it? In this two-part series, we'll explore the different stages of foreclosure, from the very beginning to the way that homes are auctioned off.

What starts the foreclosure process? It's not just one missed mortgage payment. No, you'll need at least three (and sometimes up to six) missed mortgage payments before the bank comes marching in. The bank will ask the trustee to get a Notice of Default from the County Recorder's Office. This is the official documentation that puts the borrow on notice; that means that you're facing foreclosure.

What happens then? It's a lot less dramatic than in the movies. No hired thugs will come kick you and your furniture out. Instead, the homeowners will receive a Notice of Sale in the mail. This will also be posted on the property, and you'll soon see your property being advertised on websites and local newspapers.

Don't despair, though -- you haven't necessarily lost your home at this point. This is very important to remember if you love your home and want to fight to keep it. (If, however, you've accepted the inevitable, this process does give you a little bit of time to find a new place to live.) The reinstatement period usually goes up to five days before the property auction. During that period, you are welcome to try and find a solution. The easiest is to come up with extra payments to cover the missed payments.

There are ways to delay foreclosure, though they may not seem terribly palatable. The most drastic one is to declare bankruptcy, and depending on the path that you take with this, you might actually come out of the whole thing better. Here's more on how bankruptcy affects the foreclosure process.

In our next post, we'll look at what happens with the foreclosed property when it hits the auction block.

Search for foreclosure homes www.bestreohomes.com 

Posted: Tuesday, February 23, 2010 3:28 PM by Israel and Rachel Gonzalez


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