Bank Foreclosure Auction?: Know the Foreclosure Procedures Involved

Foreclosure is a situation in which a homeowner is unable to make full principal and interest repayments on his/her mortgage, which allows the lender to seize the property, evict the homeowner and sell the home, as specified in the mortgage deal. One month after the homeowner misses a mortgage loan payment, he/she is in default and will be notified by the lender. Three to six months after the homeowner yearns for a mortgage payment, presuming the mortgage is still delinquent, and the homeowner has not composed the missed payments inside a specific grace period, the lender will commence to foreclose. Typically the farther behind the customer 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 the own foreclosure laws in the notices the lender must post publicly and/or with the homeowner, the homeowner's options for bringing the loan current and avoiding foreclosure, and the method for selling the property. In twenty-two states – including California, Illinois, and Nyc – judicial foreclosure is the norm, meaning the lender must go through the courts to get agreement to foreclose by showing the borrower is late.

If the foreclosure qualifies, the local sheriff sales the property to the highest bidder to attempt to recoup what the bank is due, or the bank becomes the owner and markets the home 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 of the home, usually will take 480 to 700 times, in accordance with the Mortgage Bankers Organization of America.

The other 28 states – including Arizona, California, Georgia and Texas – mostly use non-judicial foreclosure, also called the power of sale, which tends to be faster and really does not go through the courts unless the home owner sues the lender.

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