| If you're in a situation where foreclosure seems | | | | actually delinquent. |
| imminent, you may be wondering, just how does | | | | The next step in the foreclosure process usually |
| foreclosure work? There are some important | | | | occurs at about 60 days after the lender should |
| things you must know about foreclosure, | | | | have received the payment. At this time, the |
| especially if it seems you might have one in your | | | | lender will turn the delinquent account over to |
| future. | | | | their legal department to begin formal foreclosure |
| Foreclosure is a process that is used by lenders | | | | proceedings. Their first step is usually to hire a |
| to claim property used as collateral against a | | | | local law firm to initiate the actual foreclosure. In |
| mortgage loan. As much as the rising foreclosure | | | | some cases the lender may keep a local firm on |
| rate has made the news lately, lenders would | | | | retainer. |
| really rather not foreclose on your house. | | | | It's at this point in the foreclosure process that |
| Although it may seem quite the opposite when | | | | the proceedings are made public. It is a law in |
| the collection letters and phone calls come | | | | most jurisdictions that foreclosure notices must |
| streaming in, lenders would rather work out the | | | | be made public. The foreclosure notice is recorded |
| problem and avoid foreclosure. They're not in the | | | | at the county courthouse. They details of your |
| real estate business, and selling foreclosed | | | | foreclosure and delinquency will be published in the |
| properties costs them a good bit of resources. | | | | legal or real estate section of your local paper. In |
| Having to sell the properties at a loss, which is | | | | other cases they'll be posted at the county's |
| often the case, leads to even greater losses for | | | | website or at the courthouse itself. |
| the lender. | | | | In many cases, the lawyers retained by the |
| Sitting on a huge portfolio of foreclosed | | | | lender will plead their case before a judge in a |
| properties, rather than receiving a steady income | | | | formal foreclosure proceeding. If the judge |
| stream from mortgage payments can cause | | | | approves it, your house will be readied for sale to |
| major problems for the lender. The real estate | | | | the highest bidder. This usually occurs at about |
| market in many areas is soft, making properties | | | | 120 days after the payment was missed. Some |
| difficult to sell. In many cases foreclosed | | | | states allow non judicial foreclosure proceedings, |
| properties need substantial renovation before | | | | and some allow either judicial or non judicial |
| they're sold, another reason lenders would rather | | | | foreclosures. |
| avoid a foreclosure situation altogether. | | | | There is a huge difference in the actual |
| For the above reasons, being proactive and trying | | | | foreclosure timeline depending upon the state |
| to work out a foreclosure avoidance solution | | | | where the property lies, however. For example, |
| should be the first course of action if you fear | | | | the process period in Texas, Georgia, and |
| your home may be in danger. If that fails and it | | | | Tennessee are very short, 27 days, 32 days, and |
| seems foreclosure is unavoidable, here is how | | | | 40 - 45 days respectively. On the other hand, |
| foreclosure works and what you can expect. | | | | New Jersey, Illinois, and New York have much |
| First, you typically must be 60 days behind on | | | | longer foreclosure process periods, at 270 days, |
| your payments before a foreclosure begins. | | | | 300 days and 445 days. |
| Before you reach that milestone, you will typically | | | | Some states also allow what's termed a |
| be contacted when your first mortgage payment | | | | "redemption period" where you'll actually be |
| is about 30 - 45 days late. Do not avoid this | | | | granted the right to buy your house back from |
| contact. It may be your best chance to work out | | | | the auction winner. If your state has such a |
| your foreclosure. | | | | period the length of it varies. In California, Missouri |
| After you've been contacted or contact has been | | | | and Alaska it's one year, while Minnesota allows 5 |
| attempted by the lender, the next step in the | | | | years. On the other end of the spectrum, |
| foreclosure process is usually a letter sent by the | | | | Massachusetts, Texas, Florida, and Georgia, |
| lender to you demanding payment. This is a | | | | among other states, allow no foreclosure |
| formality. Typically the letter states that you, the | | | | redemption periods. |
| borrower, have 30 days to make the delinquent | | | | If you're facing possible foreclosure, the most |
| payments and any late charges that have been | | | | important thing is to be proactive. Contact your |
| assessed. | | | | lender and attempt a solution. It's in both party's |
| At this point your delinquency has been reported | | | | best interest to do so. You don't want to have a |
| to the credit reporting agencies, so your credit | | | | first hand look at how the foreclosure process |
| score will have suffered. That is a huge reason to | | | | works. |
| try and work something out before you are | | | | |
