A Quick Guide On Real Estate Forclosure
Foreclosure initially begins with a payment default made by the lender. It refers to a legal process allowing a lender to take back the possession on the defaulted property. If payments have been ignored successively up to six months then the lender files what is so called Default Notice.
The lender gives the borrower notice up to five days to start a period of reinstatement. The state will lay down a repayment schedule and repayment amount for the borrower to halt the foreclosure procedure. This is known as the pre-foreclosure period.
If the loan defaulted is not properly carried out, a state date for the foreclosure is firmed up. A Notice of Sale will be received by the borrower. This Notice will also be transmitted to the government`s office concerned where the property is situated. It will also be published in the print media. The property is awarded during this period to the highest bidder. A corresponding cash deposit will have to be made immediately. The bidder will then obtain the trustee’s deed. This enables the borrower to pay the defaulted loan and ascertain that the credit report does not have a default stated.
Sometimes the mortgage lender himself will take ownership. This may be through an agreement with the borrower in the pre-foreclosure period. In general the lender will choose to sell the property and recover the loan. The lender will provide the essential maintenance the property may need.
The foreclosing lender schedules the auction and an opening bid. This equals to the borrower’s loan balance which is outstanding, accrued interest, attorney fees and any miscellaneous fees involved. In case the highest bid is less than the opening bid, the legal officer will purchase the property on behalf of the lender. If the opening bid is not met, the property is tagged as real Estate Owned.
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