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Understanding the Process of Foreclosure

February 17, 2012 | Comments: 0 | Views: 149

When the owner of a property cannot make his mortgage payments, is in arrears on property taxes or cannot pay another loan that uses as collateral his home or other property, a foreclosure proceeding can be undertaken by the lender or lien holder in order to recoup the dues owed. If this process goes through from start to finish without a remedy being offered to the lender by the property owner, the result is most often seizure and sale of the property in question. As the foreclosure process is played out, the homeowner will have the opportunity to try to remedy the situation. The process is not horribly complicated but it is quite stressful when one's home lies in the balance.

After missing as few as three payments on either a mortgage or other qualifying debt, a property owner will receive an official document called a Notice of Default. At this point the owner has been made formally aware of the fact that the lender intends to exercise its right to seize the property if steps are not taken to make an acceptable arrangement to avoid the sale of the property. Generally, up until the last few days prior to the sale of the property, a lender will happily accept a payment in full of arrears and will stop the proceedings.

After some time passes the lender will move to sell the property. A notice of Sale will be filed in the appropriate jurisdiction. The owner will receive a copy, and one will be posted to the property. Also, a Notice of Sale listing the details of the property auction date and time or the particulars for someone to step forward and buy the property will be placed in local newspapers. There is generally still some chance to save the property for the homeowner if the loan is made current, the payments caught up and all fees incurred by the lender are paid by the property owner. In some cases the lender may evict or ask a property owner to vacate, seizing the property and selling it at a future date.

The owner will forfeit all rights to the property and, in most cases, its contents should a sale of seizure take place. These sales are generally made according to the terms listed in the Notice of Sale. Most often the new buyer will have to pay cash for the property. Usually, a cash deposit is left immediately at the sale. The buyer will have only a short time period before which the payment for the balance due will be required in cash. The new buyer will own the property from that point forward.

To learn more about the Foreclosure Process and the different parts of the foreclosure proceedings, you may want to visit:

Source: EzineArticles
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