The last thing that any homeowner wants to hear is that they are at risk of foreclosure. When a mortgage cannot be paid for several months, the process can be triggered. Borrowers are responsible for making the necessary arrangements so that they can prevent eviction and the loss of their home, as an experienced foreclosure lawyer like one from Therman Law Offices, LTD can discuss with you. If you are not sure what the process entails, here are the basic steps that you should be aware about.
If a borrower misses a mortgage payment, a payment default goes into effect. The terms of when exactly a payment default is triggered depends on each contract and varies lender to lender. While there is a grace period that many lenders allow, it is only usually limited up to around two weeks. Borrowers will receive a warning so that they can make their payment, but if they do not respond to the lender, they may be charged with a late payment fee.
Notice of Default
A notice will be sent to borrowers called a notice of default, which occurs after several consecutive months of missed payment (typically 90 days) and the borrower is given the opportunity to complete their payments. This notice is sent before the foreclosure process can officially begin. Borrowers can make up any payments that they have missed during this time before they will be subject to foreclosure.
Notice of Trustee Sale
Once the borrower has received the notice of default, they will be given about three months to make payments. This is called a Notice of Trustee Sale, which is sent out to borrowers by mail. In addition to their mortgage payments, borrowers must pay back any fees, interest, as well as unpaid taxes. They are also responsible for making sure their insurance is paid. If no payments are made, lenders can determine an official date for the sale of the property. Each state has its own requirements for how the foreclosure process can begin.
The bank can determine the date of the sale of the property. They must wait about three weeks following the date of the notice of trustee sale before they can set a specific date. The auction will be public, and a starting bid is determined by the lender. The property will be sold to whichever party places the highest bid as long as they are eligible to proceed with the purchase.
Following these initial phases, the eviction process can formally begin. This can happen as soon as there is a new property owner. Anyone living in the home will be ordered to leave the property immediately or face consequences.
There are actions you can take to prevent foreclosure and preserve your home, and having a lawyer is highly recommended. To obtain more information about what kind of resources and legal services that you can receive regarding bankruptcy and other debt relief possibilities, arrange a consultation with a skilled lawyer who has protected clients from foreclosure near you.