Learn The Foreclosure Process And Discover Helpful Tips To Avoid Foreclosure
By Cecilia Valenzuela
Nobody likes to talk about foreclosures especially if it is their own. Unfortunately, foreclosures are occurring more than ever in every part of the United States.
Need some advice on avoiding foreclosure?
Here is some general information about foreclosures.
Several states have a record number of foreclosures, such as Arkansas, Arizona, Colorado, California, Florida, Illinois, Massachusetts, Maryland, Michigan, New York, New Jersey, Ohio, Texas, Utah, Virginia, and Wisconsin.
CNN Money reports that adjustable-rate mortgages, especially mortgages that are considered, sub-prime adjustable rate mortgages, continue to contribute to foreclosures.
According to the San Francisco Chronicle, Americans borrowed $2.2 trillion dollars through attractive adjustable rate mortgages between 2004 and 2006.
These adjustable rate mortgages were hard to pass up with low monthly payments.
Unfortunately, these ARMS (adjustable mortgages) cannot last forever. Experts explain that these adjustable rate mortgages need to reset themselves in order to make up for the difference through higher rates, which means a higher mortgage payment.
You don't need to be an expert in real estate to figure out that when the banks significantly raise someone's mortgage payment, you are going to see many foreclosures.
It's also predicted that as these mortgage loans reset, 1.11 million homeowners will lose their homes. This prediction was reported following a study completed by First American CoreLogic, a firm that documents home mortgage risks.
If you fail to make a payment by the due date, the lender has every right to start the foreclosure proceedings. Many banks will allow you a "grace period," so as not to start any foreclosure process.
After a certain period of time, the lender will send you a certified letter stating that your loan is in default. Included will be any penalties and any unpaid mortgage totals. It is important that you contact the lender to try and work out a plan to pay the bank back.
Banks are not in the business of owning homes; banks are in the business of lending money. Banks do not want the house back! Contact them and try to work out an agreement to pay them back the unpaid payments.
Your loan will likely be reinstated if you bring the mortgage back to good standing if you pay back any outstanding mortgage payments and fees.
If the lender has given you the allotted time to make the loan current, and you cannot make the payments, the loan will still be considered in default and there will be a scheduled auction.
Following the auction, if there is any money still owed to the lender, the homeowner may be required to pay those debts owed. If there is money left over from the auction, that amount of money will go to the foreclosed homeowner, if all of the fees have been paid to the lender.
With any court foreclosures, the sheriff carries out the sale, which is about 45 days after the county clerk orders the sale. The auction is open to the public which means anyone who has the available funds, may bid on the foreclosed
Generally, the accepted bid must be paid to the sheriff no later than 5:00 P.M. on the day of or the day after the auction.
A certificate is issued following the foreclosure sale. If the property is not abandoned at the time of the sale up to the next six months, this is known as the redemption period. Some states will allow the borrower to redeem the property. Any secondary lender may redeem the property within a certain amount of time. In order to redeem the property, the total amount owed including any fees, must be paid.
If there isn't anyone who redeems the property, the sheriff will then transfer the ownership to the winning bidder at the time of the foreclosure auction.
With Out of Court Trustee Sales, notice of the sale is noted which includes the property description, date, time, place, etc. The auction notice is then recorded with the county.
The trustee mails the notice to all interested parties. This notice is sent out three months before the sale date and will be published in the local newspaper.
No less than 20 days before the sale, the foreclosure auction notice is posted on the property and the county courthouse.
The day before the sale is scheduled to take place and leading up to the sale, the trustee must provide the opening bid of the sale to anyone who inquires about the sale. If not, the sale might have to be delayed for a short period of time.
Out of Court foreclosure sales require every bidder to provide a refundable $10,000 deposit in order to bid. The trustee keeps the deposit of the individual with the winning bid.
The winning bidder has until 5:00 P.M. by the next day to pay his/her bid price.
Following the sale, the trustee then transfers ownership of the foreclosed property within seven days. The proceeds of the sale are paid directly to the primary lender, then to any secondary lenders that exist.
There is no right of redemption following Out of Court foreclosure sales.
Bank foreclosures have occurred in record numbers. If you are an investor, your'e likely to find foreclosures all around the U.S.
Will foreclosures decline in numbers? Only time will tell.
The information provided here within, is not considered professional legal advice. It is always recommended that you seek professional legal advice such as a local real estate attorney.