The Foreclosure Process

The process whereby the banks sell your house to recover the amount owing and unmet payments varies from country to country and state to state.

For you, the homeowner, the process is overwhelming and confusing and keeping a cool head can be difficult. Thirty days to sort out an ongoing problem just doesn’t seem to be enough. And if you don’t have money to pay your current bills how the heck can you afford a lawyer to guide you and stop the foreclosure of your house?

It isn’t too late no matter where you are in the foreclosure process.

 

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Determine the Foreclosure Process For Your Location

In the US there are three different methods employed by the banks in foreclosures and the method your bank uses will depend on the law applicable to your particular state.

Variations in the laws for different states include (but are not limited to):

  • How you are served any notices – this could be by mail, registered or otherwise or personal delivery
  • Periods of grace – how long you have to respond or make good – usually 30 days
  • The types and number of notices to be served
  • Who serves the notices

Generally you have about 3-6 months from defaulting on your first payment before the foreclosure will take place, although the process will start within days of you missing the first payment.  Additional penalties for overdue amounts can start accruing from 10 – 14 days after missing the first payment. Ironical that the bank want late payment fees when you are struggling to meet the original payment.

Despite the process taking 3 – 6 months you will probably be in default after 30 days at which point the tempo of proceedings will increase substantially.

Once all the options available to the lender have been exhausted and if no agreement has been reached to settle the amount then the foreclosure will be initiated. There are strict laws that must be followed in notifying you (and all interested parties) as to the order and dates of proceedings. Once sold, the occupants will have a limited time to vacate.

Types of Foreclosures In USA

There are three types of foreclosures commonly employed in the USA; Statutory Foreclosure, Strict Foreclosure and Judicial Foreclosure.

Statutory Foreclosure

A statutory foreclosure (sometimes known as “Power of Sale”) is legal where a “power of sale” clause is included in the mortgage. In a statutory foreclosure it is the lender that carries out the sale of the property, in terms of the “power of sale” clause, and after all the preceding legal requirements have been completed. Statutory sales are expedient for the lender but are sometimes subject to judicial scrutinization to ensure the correct legal process has been adhered to.

Strict Foreclosure

Not often used, Strict Foreclosures are enforced where the debt exceeds the value of the property. In effect if the homeowner cannot settle the outstanding amount, within a specified period, ownership of the property reverts to the lender.

Judicial Foreclosure

A lot of states require this type of foreclosure and all allow it. As the name suggests this type of foreclosure is undertaken by the law – the local sheriff’s office or court – after notice has been served on the defaulter and a specified number of days has passed to allow the debt to be paid.

Once foreclosure is complete and the house is sold you may have a redemption period which should be notified to you as per the legal requirements governing the type of foreclosure used.

Where Are You In The Foreclosure Process?

Understanding your rights.

What Lies in Your Debt and how to use this information can quickly and completely loosen the noose currently tightening around you.

United States Foreclosure Laws