Foreclosure Steps

As the global economy melts under the heat of a worldwide financial upheaval, Americans are fighting to maintain their financial status too. Most people are thinking about ways to deal with the sudden and daunting changes in their lives. As the rate of unemployment and industrial slowdown goes up, it’s becoming harder than ever for people to maintain a sound financial position.

Many of them are failing to arrange the funds to pay the bills, insurance premiums and make mortgage payments. If you are worried about a possible foreclosure, it is important to know what it’s all about, especially the steps involved in foreclosure.

Basically, foreclosure steps can be classified as those given below:

Step #1: Defaults in Payments

if you are facing foreclosure, you have probably not made one or more of the mortgage payments. That’s a common reason why many people get under the foreclosure net. While some may not be able to make mortgage payments due to illness, family problems and job loss, others are missing payments in response to the resetting of adjustable rate mortgages.

Step #2: Notice of Default                            

when you fail to make mortgage payments, the lender sends the Notice of Default. It is their way of reminding debtors that they are missing out on payments, starting a legal process. The Notice of Default stage is the right time to try and avoid protection foreclosure. In other words, there’s still time to repair the damage.

Step #3: Clear the Debt

depending on the sate where you reside, you may have about 45-180 days to clear your debt. This can be done in several ways. You can sell the house, renegotiate the terms of loan, make the debt payment or turn over the house to the bank.

Step #4: Foreclosure                                                        

always remember that foreclosure is the legal process wherein the bank takes formal possession of your house. Before anything gets resolved, specific action is required from your side. In simple terms, there are specific steps that need to be taken by you before the home is taken by the bank under legal foreclosure.

If you cannot get rid of the debt through your own resources or the bank’s help, you can explore options like a short sale, selling the house, or a Deed in Lieu of Foreclosure. Only when these alternatives have been explored will the bank initiate the foreclosure. Sometimes you can fight the foreclosure and seek legal remedy.

Step #5: Sheriff’s Sale

once the foreclosure of your home takes place; it is sold at a Sheriff’s Sale. In this process, anyone can bid on the house but it is common for the bank to buy the house for $1 over the deficiency.

Step #6: Redemption Period

the redemption period gives you a final opportunity to claim your house back from the foreclosure. To do so, you must come up with the money to pay off the amount for which the house was sold at the Sheriff’s Sale. A short period of time is given for the same after the sale of the house.

Mike Greaves is a self-made entrepreneur, a well known travel consultant and internet marketer. Over the years he has traveled across the world and has numerous writings credited to his name in many renowned publications. His areas of writing include travel experiences including reviews of world best hotels and he has also gained expertise in areas of legal foreclosure, how avoid foreclosure and subprime foreclosure.

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