For many home owners, facing the potential prospect of foreclosure is inevitable. No matter what the circumstances are in connection with the default, it is often a stressful and depressing period of a home owner's life when losing a home. To often, home owners do not know the steps and legal process involved in a mortgage default and foreclosure.
-Mortgage default usually occurs when the first mortgage payment has not been received by the lender. A mortgage payment is usually due between the 1st and 15th of the month after which a payment will be considered late and, most likely, incur a late fee. If this previously happened, a lender may begin to call the borrower after the first month.
-When a mortgage payment has not been made for 60 days, the lender may send out a demand payment letter. At this time, the lender may also be calling the borrower to ascertain the situation as to why payment has not been made.
-After 90 days, a lender will send or hand deliver a notice of default to the borrower. This notice will also be recorded with the county records department. At this notice usually gives the borrower another 90 days to bring their mortgage up to date.
-If the mortgage has not been settled after 90 days, a notice of trustee sale will be recorded with the county. This notice will also be posted publicly in the newspaper for three weeks. The notice basically describes the property that is to be sold at public auction.
-At the trustee sale, auctions bids are taken and the highest bidder is the purchaser of the home. The lender has the right to set a minimum or reserve bid based on the outstanding loan amount, unpaid taxes and liens, and any other outstanding costs.
-If the property does not sell, the lender is now the owner and will sell it themselves or through a real estate agency.
-Usually by this point, the original owners have vacated the property. If this is not the case, the lender will send an eviction notice with a definite eviction date giving the occupants sufficient time to remove themselves and their belongings from the property. Someone from the Sheriff's department will usually visit the property on the eviction date to make sure that the premises have been vacated.
In order to prevent this from happening, it is important to contact your lender is you have not been able to keep up with your mortgage. There are potential modifications and even forbearance of the mortgage if the owner is unemployed. Research your options before giving up.