To the average homeowner, understanding the foreclosure process is not on their top five things to learn about this year. The entire process of foreclosure seems daunting to most especially if you find yourself as someone needing to learn about it in the midst of going through it. In this article you will find some advice on understanding the foreclosure process and the steps taken by the lender.
Foreclosure is the process in which the lender recovers the amount owed on the defaulted loan. The lender does this by repossessing the property therefore securing the loan. The foreclosure process is actually pretty simple and typically goes through the following stages:
1. Notice of Default- After about three to six months of missed payments, the lender orders a trustee to record a Notice of Default (NOD). This notifies the borrower that he or she is facing foreclosure and starts a reinstatement period that usually runs until five days prior to the home being auctioned.
2. Notice of Sale- If the loan isn’t brought current within three months, a foreclosure sale date is determined. The homeowner will receive a Notice of Sale, and it will also be posted on the property. In addition, the Notice of Sale is recorded at the County Recorder’s Office and is also published in newspapers surrounding the county in question for a three-week period.
3. Trustee Sale- This typically occurs on the steps of the county courthouse in which the property is located. The time and location of this sale are in the Notice of Sale. At the Trustee Sale, the property is publicly auctioned to the highest bidder, who must pay the high bid price in cash, with a deposit up front and the remainder within 24 hours. The winner then receives the trustee’s deed to the property.
What homeowners facing a foreclosure must understand is the bank is not going to lose their money on your foreclosure. They are going to try and recover as much as possible of the money they have lent, plus any revenue lost during the foreclosure process. If you find yourself trying to stop a foreclosure, call your lender immediately and find out your options. The earlier you seek help, the more restitution possibilities there are available to you.
