Are you facing foreclosure? A Home Foreclosure occurs when a homeowner fails to repay their mortgage loan to their bank or lender.
More specifically, it’s a legal process by which the owner forfeits all rights to the property. If the owner can’t pay off the outstanding debt or sell the property via short sale, the property then goes to a foreclosure auction. If the property doesn’t sell there, the lender then takes possession of it.
Why Do Sellers Go Into Foreclosure?
Sellers stop making payments for a variety of reasons. Although, very few choose to go into foreclosure voluntarily. It’s often an unpredictable result from one of the following:
Laid-off, fired or quit job
Inability to continue working due to medical conditions
Excessive debt and mounting bill obligations
Disputes with co-owner, divorce
Job transfer to another state
Unaffordable maintenance issues
So what happens in a foreclosure? The specifics can vary according to state law, but we can break it down into five stages:
WHAT HAPPENS WHEN YOUR HOUSE IS IN FORECLOSURE?
Stage 1: Missed Payments
It all starts when the homeowner – the borrower – fails to make timely mortgage payments. Usually, it’s because they can’t, due to hardships such as unemployment, divorce, death or medical challenges.
If you’re in this tough situation, it’s essential that you talk to your lender as soon as possible. There’s a variety of options to help keep you in your home. The foreclosure process costs the lender a lot of money, and they want to avoid it just as much as you do.
Sometimes, a borrower may intentionally stop paying the mortgage because the property might be “underwater” (in other words, the amount of the mortgage exceeds the value of the home) or because they’re tired of managing the property.
Whatever the reason, the bottom line is that the borrower can’t or won’t meet the terms of the loan.
Stage 2: Public Notice
After three to six months of missed payments, the lender records a public notice with the County Recorder’s Office, indicating the borrower has defaulted on the mortgage. In some states, this is called a Notice of Default (NOD); in others, it’s a lis pendens – Latin for “suit pending.”
Depending on state law, the lender might be required to post the notice on the front door of the property. This official notice is intended to make borrowers aware they are in danger of losing all rights to the property and may be evicted from the premises. In other words, they’re in danger of foreclosure.
Stage 3: Pre-foreclosure
After receiving a NOD from the lender, the borrower enters a grace period known as “pre-foreclosure.” During this time – anywhere from 30 to 120 days, depending on local regulations – the borrower can work out an arrangement with the lender via a short sale or pay the outstanding amount owed.
If the borrower pays off the default during this phase, foreclosure ends and the borrower avoids home eviction and sale. If the default is not paid off, foreclosure continues.
Stage 4: Auction
If the default is not remedied by the prescribed deadline, the lender or its representative (referred to as the trustee) sets a date for the home to be sold at a foreclosure auction (sometimes referred to as a Trustee Sale). The Notice of Trustee Sale (NTS) is recorded with the County Recorder’s Office with notifications delivered to the borrower, posted on the property and printed in the newspaper. Auctions can be held on the steps of the county courthouse, in the trustee’s office, at a convention center across the country, and even at the property in foreclosure.
In many states, the borrower has the “right of redemption” (he can come up with the outstanding cash and stop the foreclosure process) up to the moment the home will be auctioned off.
At the auction, the home is sold to the highest bidder for cash payment. Because the pool of buyers who can afford to pay cash on the spot for a house is limited, many lenders make an agreement with the borrower (called a “deed in lieu of foreclosure”) to take the property back. Or, the bank buys it back at the auction.
Stage 5: Post-foreclosure
If a third party does not purchase the property at the foreclosure auction, the lender takes ownership of it and it becomes what is known as a bank-owned property or REO (real estate owned).
Bank-owned properties are sold in one of two ways. Most often, they are listed by a local real estate agent for sale on the open market. Other lenders prefer to sell their bank-owned properties at a liquidation auction, often held in auction houses or at convention centers.
Do not just walk away from your home or let the bank take back that for which you have worked so hard for. Having someone in your corner that will represent your best interests at all times is much easier than trying to negotiate any of these complicated options on your own.
Don’t give up on your dream of being a homeowner, let me be in your corner.
SEATTLE FORECLOSURE HELP
Experience, Knowledge, Network
Having worked in the industry for over a decade, Ky has been in his fair share of housing situations with clients. Perhaps one of the most challenging scenarios is the prospect of a Short Sale or Foreclosure. After years of hard work, the prospect of losing a home can be heartbreaking, and while the process is difficult, Ky’s goal as a Realtor has been to help homeowners through that challenging time.
From working with clients that have fallen behind on mortgages ranging anywhere from $50,000 to over $1,000,000, that experience has given Ky the expertise on getting clients out of any tight situation. With contacts to highly qualified professionals – from mortgage bankers to bankruptcy attorneys – this reputable network can create the right team to serve your best interests. Do not just walk away from your property or let the bank take that for which you have worked so hard for.
As a husband and father, Ky Dewald knows the significance of a home to a family. Unfortunately, there are many scams out there designed to take advantage of those facing a Short Sale or Foreclosure, but with Ky as your representation, he is there to guard against them. Having someone experienced in your corner that will represent your best interests at all times is much safer and easier than trying to negotiate the same complicated options on your own.
You have invested time and effort into owning and maintaining your home, don’t let that go to waste.
There is no fee or any obligation for a consultation, so please do not hesitate to contact us and we can start working towards helping you start the next chapter of your life.