For most the idea of foreclosure is a nightmare, for others it’s their reality. To properly examine foreclosure we should know what the term foreclosure technically means. Foreclosure, is defined as a legal action or process by which the lender obtains a court ordered termination of the borrowers equitable right of redeeming the property. Others, besides lenders, can foreclose on a real estate property, as well. These others can include the city or state for back taxes, unpaid contractors can take action to foreclose, even neglecting homeowners association dues can cause the foreclosure on an otherwise up to date loan.
The process of foreclosure is a painful, heart aching experience for any homeowner or real estate investor. The process entails first, of course, missing multiple payments, sometimes just one missed payment is enough for the lender to send out a notice to accelerate. This action is, usually, taken after 60 days of delinquency, or failure of payment.
If the borrower does not make the loan current, the mortgage lenders next step is to send a demand letter. If you receive this, that means the mortgager has hired an attorney to write and formally notify the borrower thatÂ the loan has to be brought to current immediately, or the foreclosure process will begin.
If the loan has not been made current after receiving the demand letter, the lenders next act is to issue a notice of default. This notice will have the full amount the borrower owes to keep the property their own. The borrower has no more than thirty days to respond a notice of default, before the actual foreclosure process proceeds.
If the borrower was foolish enough, or just lacking the will, not to respond to the previous notices and warnings, a notice of sale will be sent. At this point, a sheriffs auction date has been set and your property will be sold to the highest bidder. The best chance any real estate owner has to keep their property is not to become delinquent with the payments, which can be, admittedly, harder to do than it is to write.
The bottom line for any lender, is that they want you to keep what you have, they want the loan to be paid off as it was scheduled to be. Talk with your property or mortgage lender, keep in close communication with your loan officer, and you never know when they may offer some friendly advice that will save your property. If the relationship is in decent standing they may even cut you a break and work out a standard payment schedule to get the past due amounts back to being current.
The definition of foreclosure is available at, http://en.wikipedia.org/wiki/Foreclosure.