Foreclosure is a situation in which a homeowner is unable to make full principal and interest payments on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as specified in the mortgage contract. One month after the homeowner misses a mortgage payment, he/she is in default and will be notified by the lender. Three to six months after the homeowner does not show for a mortgage payment, assuming the mortgage is still delinquent, and the homeowner has not made up the missed payments in just a specified grace period, the lending company will commence to foreclose. The particular farther behind the debtor falls, the more difficult it becomes to catch up since lenders add fees for payments that are 10-15 days past due.
Each state has their own foreclosure laws covering the notices the lender must post publicly and/or with the homeowner, the homeowner's options for bringing the loan current and avoiding foreclosures, and the procedure for promoting the property. In twenty two states – including Fl, Illinois, and Ny – judicial foreclosure is the norm, meaning the lender must go through the courts to get permission to foreclose by proving the borrower is delinquent.
If the foreclosure qualifies, the local sheriff auctions the property to the maximum bidder to try to recoup what the bank is due, or the bank becomes the owner and markets the property through the traditional route to recoup their loss. The entire legislativo foreclosure process, from the borrower's first, missed repayment through the lender's sale for the home, usually requires 480 to 700 days and nights, based on the Mortgage Bankers Association of America.
The other 28 states – including Arizona, California, Georgia and Texas – mostly use non-judicial foreclosure, also called the power of sale, which is commonly faster and does not go through the courts unless the house owner sues the lender.
Another Image of Foreclosure Redeemed:
Tanay Rural Bank foreclosed properties as of September 2011
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