©opensourceway - flickr

©opensourceway – flickr

If you are facing foreclosure, you are going to have a lot of questions on your mind about what exactly is happening.  In this article, I’m going to go over some of the most commonly asked questions that people have when it comes to the foreclosure process.

What is Foreclosure?
Foreclosure is when a secured creditor, a bank, lender or mortgage company attempts to collect money that you borrowed from them in order to purchase or refinance your home.  The foreclosure process starts when you do not have the money to pay them back and you have missed a couple payments on your mortgage.  The institution your borrowed money from will then take back what you borrowed money for, like your home.

Can the Bank Kick me out of my home?
Yes and No. They won’t just come and kick you out right away.  There is a procedure within the court system that the mortgage holder must follow, before they will come and evict you out of your house, but eventually this can and will happen.

How do I know if the bank will possibly be foreclosing on me?
There is a process known as the pre-foreclosure. This is the time where you will have signs that the bank is getting ready to foreclose on you.  The process usually goes like this:
1.    Homeowner misses mortgage payment
2.    Lender sends late notice
3.    Homeowner misses another payment
4.    Lender attempts to resolve the situation in a notice or phone call
5.    No arrangements are agreed upon or homeowner avoids contact with lender
6.    Homeowner misses another payment
7.    Lender then may demand that the entire mortgage is paid in full

I just missed a couple payments, how can the lender demand that the whole mortgage be paid in full?
Under the Acceleration Clause, the bank can and will demand that payment be made in full if you miss a couple mortgage payments.  Most mortgages state that if you fail to pay the bank under the terms agreed upon, they can accelerate the mortgage, meaning the full amount due.  If you miss mortgage payments, you will not only owe the amount in full, but also any interest and late fees.

I have already have missed a couple payments, what is the exact legal foreclosure process?
1.    The bank will send a notice of intent to foreclosure delivered by a county sheriff or certified mail
2.    The bank then goes to the court system to foreclosure
3.    Legal notices are required by law to be published in local papers
4.    The period during which you could have paid the bank back to avoid foreclosure expires
5.    The court holds a hearing regarding the bank’s claim that you have not paid them
6.    The court then issues an order allowing the bank to foreclose
7.    Legal notice of the actual foreclosure sale and advertisements will then be published in the local papers
8.    If no settlements have been reached by the homeowner and lender the house will go to auction and be sold to the highest bidder

Hopefully this answered some of your foreclosure questions, if you have more feel free to leave a comment and I will answer them.

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