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STAGES OF FORECLOSURE
The foreclosure process is a complex
one. It will overwhelm many people,
particularly when they are facing the
situation themselves. This article will
explain the steps taken by lenders which
foreclosing a mortgage loan. This will
also vary from one state to another
therefore you need to find out state
specific steps. The laws for filing a
case against the borrower differ from
state to state. However, the overall
process is the same throughout the
country. It is better not to default on
your payments. If you are not able to
pay back the loan on your home then
contact your bank and re-negotiate the
loan with them. You have the option of
loan modification. Given below are the
types of mails that you will get if you
miss a payment.
1)
Missed Payment – This notice will
be sent by the lender to the borrower
when he fails to make his payment on the
due date. The payment usually must be
made on the 1st of every
month. However, the federal banks have a
grace period till the 15th.
After, that date you have to pay a late
payment fee.
2)
Demand Letter – This letter is
mailed to homeowners when they don’t pay
to monthly instalments in a row. The
demand letter will be written in 60
days. The lender or the bank is willing
to negotiate with the borrower when this
letter is sent. But, after this letter
is sent the borrower should make the
defaulted payments before thirty days.
3)
Notice of Default – Referred to
as the NOD. This notification is sent
ninety days after the borrower has not
paid three monthly instalments in row.
At this point, your loan is transferred
to a foreclosure department that is
closest to where your property is
situated. The notice is recorded and the
borrower will be informed. The letter
will arrive within a period of ten days.
The borrower will get another ninety
days to settle his defaulted loan.
4)
Notice of Trustee’s Sale – If you
have not paid your dues even after
ninety days after receiving the notice
then the “notice of trustee sale” is
recorded against you. The lender will
now start the process to sell your
property. It will take about twenty one
days. The borrower will also receive the
copy of the notice for his reference.
5)
Trustee’s Sale – Also referred to
Sheriff’s sale. This will indicate that
your property is put up for sale or will
be auctioned.
6)
REO – Abbreviation for “Real
Estate Owned”. This will indicate that
no one bought the property at the
auction and will be handed over to a
broker to sell it.
7)
Eviction from Property – The
defaulting homeowner will be allowed to
stay in the house until it is bought by
some one else. However, once it is sold,
the “Eviction” notice is sent to the
borrower telling him that he has to
vacate the property immediately as it
belongs to some one else now. |
