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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. Contact one of our helpful account representatives to assist you in the setup of a high risk merchant account or offshore merchant account for a high risk merchant.