If understanding foreclosures is important to you because you are in the process of foreclosure, you’re not alone. Depending on which step you are in the process, you have a better chance of saving your house. So to help you get a grip on what’s happening to you, let’s take a closer look at the process of foreclosure.
Step #1: Defaulting on Your Loan
The step that initiates the process of foreclosure is when you default on your loan. This basically means that you fail to make payments for over a three-month period (however, some lenders give you even longer). Once you default, the lender will send you a Notice of Default (NOD) that basically lets you know it’s time to call them and work something out before it’s too late.
Step #2: Notice of Acceleration
If you don’t work something out with the lender, you will be sent a Notice of Acceleration that informs you of your need to pay your balance in full to avoid losing your home. This is where understanding foreclosures becomes imperative. You still have time to save your home, but it’s going to become more difficult at this point, so if you’ve received this notice, it’s good to try to work something out with the lender or reach out the government programs for help.
Step #3: Notice of Sale
If you have taken heed to no notices up to this point then you will receive a Notice of Sale. This notice lets you know that your property is now about to be up for sale in public auction. It will give you the date and time of the auction. At this point, though you are dangerously close to losing your home, you still own it and have the right to sell it before the auction date.
Step #4: Public Auction
If you have not been able to figure anything out up to your auction date then your home will go up for sale. This is the worst stage in the process of foreclosure because you lose your home. And unfortunately, if the house doesn’t sell for the amount of your outstanding balance, you still may owe on the home.
Understanding foreclosures is important if you are already involved in one. So don’t lose your home if you don’t have to. Instead, take time to educate yourself more on the process of foreclosure. In doing so, you may just come up with a plan to save your home.