4 Tips For Understanding How Does Foreclosure Work

If you are asking yourself how do you get the foreclosure help you need~ ,then this article is going to provide you with answers. At the end of the day if you simplify the process, there are only a handful of steps. You need to understand these steps if you think you are at risk from foreclosure. These steps include the reinstatement of the loan and the default notice being recorded.

Step 1 – Bank Acknowledges A Notice Of Default

The bank registering the notice of default is the first step in the foreclosure process. This is basically the first missed payment on your house. This wont occur on the first missed payment – only after a few. This all depends on your bank/lender and how they manage their internal foreclosure process. It depends on your bank whether they will begin the foreclosure process after 2, 3 or 4 missed payments.

Step 2 – Loan Is Reinstated

The second step to the foreclosure process is the reinstatement of the loan. The loan can be re-instated in your name. This means that just because the foreclosure process has begun does not mean you have lost your house. You wont lose your home until it is sold through auction. If you can cough up the money owing on the missed payments – it is possible to re-instate your loan. This is possible only up to 5 days before the sale of the house via the auction.

Step 3 – Date Of Foreclosure Is Set

The 3rd step is for the bank to set the actual date of the foreclosure auction. This is usually 3 months after the notice of default is set or around 90 days. The home owner can continue to live in the home until this date. Until the set date arrives, no-one can evict you.

The next thing that will happen is that the notice of trustee sale prepared. It will be made public that the home is up for foreclosure. A copy will then be mailed to you and also placed on the home.

Step 4 – Selling Your House At The Foreclosure Auction

The final step to the foreclosure process is that the house is sold at the foreclosure auction. This can go two ways. It is however possible for someone to make a lower bid at the auction than your outstanding loan amount. If this is whats happening, the new owner of the house can get you immediately removed from the home. This eviction can take place in less than 24 hours, and be carried out by the sheriff. If the home is not sold at auction, the bank will continue to own it. Its possible that the bank will want to evict you straight away – but very unlikely. However normally banks will get a company to manage the home until they can sell it. This could give the home owners a few weeks.

The Conclusion

So in summary – how does foreclosure work? Your average bank would expect to finalize a foreclosure within 3 months. They would tell you this. However, the actual time frame for a closure can take from 6 months to a year depending on how long the process takes and if the home sells at the auction. If you are going through the foreclosure process you don’t have to move out of the home right away.