It is important that you, as a homeowner, learn the basics of mortgage foreclosure procedures especially if you are already starting to have problems with your finances. Unfortunately, people who find themselves facing foreclosure usually do not have a clue of what they are about to go through, and this is why many of them are unable to make the most of the situation.
First of all, it has to be made clear that homes are not foreclosed just because the owner missed one or two payments. You can expect to receive a foreclosure notice, however, if you miss more than two consecutive payments on your mortgage.
You can tell them that you are just sorting out your finances and will make the payment soon, or some other reason for not being able to make the last few payments, but it won’t matter. By failing to make the payments on time, you are effectively violating the contract that you have signed before you took out your mortgage and the lender will have no choice but to take appropriate legal action and issue you a foreclosure warning.
Foreclosure procedures steps
The basic mortgage foreclosure proceedings are the same across the country and they involve the following
- First, you will get a notice from the bank upon missing one monthly payment. This can be either a letter in the mail or a phone call or both. If you just forgot the payment, make sure to post it right away but if you really do not have the money, you should have a discussion with your lender to find out what the options are. The worst thing you can do is to avoid talking to the lender because this will reflect very poorly on your record.
- If you fail to make the following month’s payment as well, the bank will have no choice but to begin the basic mortgage foreclosure procedures. You will receive a letter in the mail indicating the bank’s intentions.
- You will also have to attend a court hearing one month after receiving the notice. During this period, you should do your best to get in touch with your lender to discuss viable options that do not necessarily need to include a foreclosure process.
- If you and your lender do not reach a compromise within the thirty days, your home will automatically be put up for sale, normally at a property auction, along with other foreclosed homes.
- The court will determine the date of the auction, as well as the number of days that you can still remain in the house while looking for a new place to stay.
In case of foreclosure procedures, it is always better to leave voluntarily than to stand your ground and face eviction. The profits made from the sale of your house will be used to pay off your debt to the bank, and any leftover will be given to you.