Foreclosure Here is some basic information on Foreclosures. This information is to help give you a small, basic understanding in Foreclosures.

Yujing Facing a foreclosure can be uneasy and stressful process , especially when you are unsure of what to do. It is said that approximate 6 out of 10 homeowners questioned said they wished they understood their mortgage and its terms better. Foreclosure is the process in which a lender takes back possession of an unpaid property. When a borrower defaults on their mortgage payments, the lender will foreclose. Mortgage lenders put foreclosed properties up for sale. This is mainly a means to make back the money they’ve lost from the unpaid debt on the property.

When this happens, the loan becomes delinquent and the homeowner goes into default.

Typically lenders file a notice of default when borrowers fail to make payments for 3 months.

Once you receive the notice of default, you’ll then have 90 days to repay what you owe.

During this time, the lender will get in touch with the borrower to see whether they will be able to pay the balance of the loan and possibly give some advice and/or options they may have at the time.

If you haven’t repaid your debt, then your lender will issue a Notice of Sale(Foreclosure)

This document notifies the borrower that the lender will sell the property. It will include an auction date.

The lender will sometimes file foreclosure documents in a local court. This part of the process sometimes takes 120 days to nine months to complete. If borrowers need extra time, they can challenge the process in court.

Though the foreclosure process seems straightforward, there are a lot of ins and outs on an individual basis. That’s because foreclosure laws vary from from state to state. For instance, the process period varies by state, and so does the redemption period. So it is very important to become familiar with the Foreclosure process in your state. Also don’t be afraid to communicate with your lender. They may be able to help or give you options on your current situation.

What Else Should I Know?

If you are thinking about going into foreclosure, there are a number of things to consider:
  • A foreclosure dramatically affects your credit score. FICO (credit) scores and could drop credit scores from approximately 85 points to possibly 160 points or more after a foreclosure or short sale. The amount of the drop depends on many factors and it is best to console with a professional financial company
  •  Get in touch with your lender as soon as you are aware that you are having difficulty making payments. You may be able to avoid foreclosure by negotiating a new repayment plan or refinancing that works better for you.
  •  Look out for scammers hoping to profit from your misfortune. If you decide to work with a company to help you through your foreclosure, get everything in writing and understand the fees and contract involved.

Al Krulick

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