What happens in a Foreclosure?
There are four steps throughout the process of foreclosure which are the notice of default, the acceleration, the notice of sale, and the auction.
Depending on the bank, the foreclosure process can start right after your first missed payment. The bank will most likely take into account how long you have had your mortgage and what your payment history is. Usually the process will take 6 to 9 months, depending on the amount of foreclosures your bank is dealing with plus how many are happening in your area.
Notice of Default- This is the best time to stop the foreclosure. Contact your bank and let them know you want to avoid foreclosure. They may be able to grant forbearance, which is where they let you go a set amount of time without payments. This is also where you would consider loan modification. Depending on the bank, they may wait until you are three months behind on payments before sending out a notice of default and starting the foreclosure process.
Notice of Acceleration- In the next step, the bank will send out a notice of acceleration. The notice of acceleration will usually arrive a few weeks to a month after you received the notice of default. The time between the notice of default and the notice of acceleration is given to the borrower so you can contact the bank and work with them to avoid foreclosure. Upon receiving the notice of acceleration, you may still have a chance to save your home but you will need to have all of the payments and fees to deliver to the bank. Even if you do this, the bank will most likely want to review your financial situation.
Notice of sale is, quite simply, the date the bank intends to sell your house at public auction at the county courthouse. There is only one method of selling foreclosed homes, on the steps in front of the county courthouse. The notice of sale will have the date and time of the auction. At this point the only way to stop the foreclosure is to file bankruptcy to postpone it, or find a person to buy your house for you.
Auction- Once your house goes up for auction, the only way you are keeping it is if you can find someone to buy it for you, or buy it yourself.
SO…The lesson learned here is that should you unfortunately fall behind on your mortgage payments, you can still keep your home, if you act with decisiveness.
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