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What Steps Bring a Homeowner to Foreclosure? |
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Written by Webmaster
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By Scott Staudt
 Despite monthly reminders that the mortgage is late, it is surprising how many homeowners are caught off guard when they larn they are headed towards foreclosure. They put off the inevitable, or they spend time attempting to get the money to pay. If you know what the usual procedure for foreclosure is, you will know when it really is too late.
Step one is when the first loan payment is missed. The bank will normally send out a delinquent notice. The borrowe should try to get the mortgage out as quickly as possible, even if it is late. If he still is not able to he must let his lender know as soon as possible.
Once the second payment is missed, the lender will usually try to make personal contact with the homeowner. They have no way of knowing if the homeowner is sick or even dead, and the reminder notices are just piling up. Make sure not to avoid your bank. Your lender wants to try to make an arrangement.
If the homeowner
fails to make the third month's mortgage, the loan is now considered in default. Now, the borrower will receive a certified notice giving the homeowner dates by which settlement must be made. This letter is called a Demand Letter or a Letter to Accelerate and failure to answer it will result in the proceedings for foreclosure to begin.
Most borrowers have given up on their home once they have reached this point, but the bank is still willing to make an accommodation.
So when the fourth month without a payment goes by, the lenderwill "call" the terms in the letter to accelerate. At this point, the lawyers becomeinvolved, and now the homeowners adds legal fees to any outstanding balance he may owe on the loan. If nothing is done now, the home will be offered at a sheriff's sale or public trustee sale, depending on the locale.
The day of the foreclosure is the day of this sale. As a rule, the notice of sale must be advertised in a local paper, notified to the homeowner and a notice posted on the home. The homeowner can still reclaim his home, but at a very expensive level.
You may have noticed one common component in each of these steps. At the conclusion of each step, the homeowner is encouraged to get in touch with his bank. If you always keep your lender advised about your situation, and try to make arrangements, you can avoid the foreclosure process.
Contact us at hypotheque or hypotheque
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