Real Estate Foreclosure
Foreclosure initially starts off with a payment default made by the lender. It refers to a legal process allowing a lender to take back the possession on the propert on default. If payments have been missed continuously up to six months then the lender lodges what is so called Default Notice.
The lender notifies the borrower up to five days to begin a period of reinstatement. The state will decide on a repayment scheme and repayment amount for the borrower to stop the foreclosure procedure. This is called the pre-foreclosure period.
If the loan on default is not put right, a state date for the foreclosure is put in place. A Notice of Sale will be received by the borrower. This Notice will also be sent to the County Recorder’s Office where the property is situated. It will also be advertised in the print media. The property is awarded during this period to the highest bidder. A deposit will have to be made upfront. The bidder will then receive the trustee’s deed. This allows the borrower to settle the loan on default and ensure that the credit report is free from loan default statement.
Sometimes the mortgage lender himself will take possession. This may be undertaken through an agreement with the borrower in the pre-foreclosure date. Generally the lender will opt to sell the property and recover the loan. The lender will provide the essential maintenance the property may require.
The foreclosing lender sets up the auction and an opening bid. This is equivalent to the borrower’s loan balance to include outstanding, accrued interest, attorney fees and any miscellaneous fees involved. If the highest bid is less than the opening bid, the legal officer will purchase the property on behalf of the lender. In the situation that the opening bid is not duly completed, the property is tagged as real Estate Owned.
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