Say Goodbye to Your Home: Steps in a Foreclosure

First of all, what does the word “foreclosure” mean? Essentially, it is the process undertaken by a mortgage company in an effort to end your home ownership. This scenario takes place after you failed to pay your mortgage for several months. The exact number of months varies from lender to lender.

The process is far from being a simple one, but it can be broken down into four basic steps. First, the homeowner will receive what is called a Notice of Default letter which formally and officially notifies them that they are behind in making their payments. The amount the owner owes and the ways in which an owner might rectify the situation will be specified. Should you receive such a notice, call your lending institution immediately to see whether you can work something out.

Second, a document known as a Notice of Acceleration will be sent to the owner, giving him one last chance to make good on the debt owed. This notice will ask for full settlement in 30 days or else the owner will then be facing formal foreclosure proceedings. If he or she still does nothing, then the home owner will be sent a final document called Notice of Sale which provides information on the day the home will be offered for sale as a foreclosure. When that date arrives, an owner must have already vacated the premises.

The lender will attempt to sell the property at an auction in the hopes that it will fetch a price that will cover both the existing indebtedness as well as other fees that have accumulated along the way. The former home owner could still be held liable for these deficiency fees.

Because regulations vary so much from state to state, it’s always wise for a home owner who is in trouble to seek expert advice before a foreclosure action hits. There are many sources available, ranging from legal aid clinics to online US government resources.