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What is Foreclosure?
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real estate due to the owner's failure to make promised payments. When you bought your house, you signed a contract guaranteed by the title to the house. That contract gives the mortgage holder the right to take the house back from you for failure to make scheduled payments.
Foreclosure is a Legal Process
First, it’s important to know that foreclosure is a legal process. Foreclosure is a legal action brought in court by attorneys hired by the mortgage holder. Only a lien holder can legally foreclose on your house.
A good attorney can Stop the Foreclosure
If your lender decides to foreclose, you will be served with a legal notice called an “Intent to Foreclose.” Once the process has begun, you would be wise to hire an attorney who really knows the laws pertaining to debt relief and foreclosure.
Don’t fall for "foreclosure rescue” Scams
There are hundreds of “foreclosure rescue specialist,” “credit doctors” and “credit counselors” out there ready to take your money and promising to save your house. There are even companies that promise to pay off your mortgage for you. Many of these people are predators. They will waste crucial time and probably do nothing to help. Again, your best move is to hire a qualified attorney to stop the foreclosure.
The Foreclosure Process Step by Step:
- You miss a mortgage payment.
- The bank sends you a late payment notice.
- You miss another payment.
- The bank contacts you to try and resolve the situation.
- You fail to reach an agreement with the bank.
- The bank invokes your loan’s acceleration clause.
Once the bank calls your loan, you’ve reached the point of no return and you need to contact an attorney who
specializes in foreclosure law to protect your rights. But if you continue to do nothing, here’s what will happen:
- Bank sends by sheriff or by certified mail Notice of Intent to Foreclose.
- Bank begins action in the court system to foreclose.
- Legal notices as required by law are published in local newspapers.
- Notice and waiting periods expire.
- Court holds hearing regarding the bank’s claim.
- Court issues order allowing bank to foreclose.
- Legal notice of actual foreclosure sale and advertisements published in local newspapers.
- Your house is sold to the highest bidder.
How long does all this take? From the time you miss your first payment to the final foreclosure sale its not uncom-
mon for nine to twelve months to pass. It also depends on your mortgage holder and how aggressively they pursue
your case.
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