What is a
Mortgage Foreclosure?
How Does Mortgage
Foreclosure Work?
What is
a Mortgage Foreclosure?
When
most people purchase real property, they
do not have enough money to simply
purchase the property outright. In order
to make the purchase, they are required
to borrow money from a lender. In
exchange for lending the money, the
lender will hold a lien against the
property. If the borrower does not make
the required payments, then the loan
goes into default and the lender can
exercise the lien against the property,
in order to take legal possession of the
property for the purpose of selling the
property to pay off the borrower's loan.
This process is called mortgage
foreclosure.
How
Does Mortgage Foreclosure Work?
The
first step in the mortgage foreclosure
process is that the loan becomes
delinquent because the borrower has not
made a required payment or payments.
When the loan becomes delinquent, the
borrower goes into what is called
default. Often, the loan will remain in
default status for ninety days while the
lender contacts the borrower to inform
him or her of the situation and give the
borrower an opportunity to pay the
overdue balance.
Once a
mortgage is in default, the lender may
then begin the foreclosure process by
filing a Notice of Foreclosure. This
means that the lender will file
documents in court or with the county
recorder, depending on the state,
stating an intention to foreclose on the
mortgage. There are a number of steps
before this process can be completed,
and the typical time period that elapses
from the filing of foreclosure until
sale of the property by the sheriff is
anywhere from 120 days to 9 months. The
borrower can also extend this process
even longer by challenging the
proceedings in court. This method will
not usually prevent the sale of the
property, but it can extend the amount
of time the borrower can remain in the
property.
It is important to be aware that once
the lender has filed for foreclosure,
the borrower will receive a great deal
of mail offering to refinance the
property or provide other assistance.
The reason the borrower receives this
mail is that the Court filing is a
public record, and anyone can access the
information. It is best to be very
skeptical about these offers and
claims, as many of them are fraudulent.
It is best to ignore these offers and
work with your lender or another
reputable financial institution to
resolve the situation.
Source:
http://www.foreclosures.bz/index.html |
