Avoid The Steps In Foreclosure

By Author: Scott F. Staudt
Total Articles: 91
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The last thing most homeowners want is to be trapped in a foreclosure, but what usually happens is that it catches them off guard, no matter how many warnings. They put off the inevitable, or they spend time trying to get the money to pay. Discover the steps to a foreclosure and you will see when the situation is getting dangerous.

The first step on this slippery slope is when the borrower misses the first monthly loan payment. The lender will normally send out a delinquent notice. Frequently, the borrower just had to wait until the next paycheck so he could get the mortgage out. If there is some question about whether he can pay it quickly, he should contact one of the bank's credit advisors.

If the borrower misses another payment, the lender will usually make direct contact. At this point, the lender does not know if there is some problem with the borrower, such as sickness, which may prevent him from paying. You should not ignore or avoid this phone call. There is still hope and they will attempt to help you resolve your payment issue.

If the borrower fails to make the third month's payment, the ...
... loan will be considered in default. This will bring about a more official notice, usually via certified letter. This letter is known as a Demand Letter or a Letter to Accelerate and failure to answer it will result in the proceedings for foreclosure to start.

This is typically the point when most borrowers have given up, but the lender is always willing to try to come to an agreement.

The fourth missed month will force the lender to nullify any conditions offered in the letter to accelerate and at this stage they have given up on the loan. At this point, the lawyers becomeinvolved, and now the borrower adds legal fees to any outstanding balance he may owe on the loan. If nothing is done at this point, the house will be offered at a sheriff's sale or public trustee sale, depending on the locale.

The official date of the home foreclosure is the sale date. This must be posted in a local newspaper, and notified to the borrower. The homeowner can still reclaim his house, but at a very expensive cost.

What do all of these steps tell us about the steps of foreclosure ? That until the very last instant, there is the time and the possibility to negotiate a solution with your lender. The most critical aspect of running into problems with your lender is keeping the communication lines open to work out an issue you both want to resolve.
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