What is Foreclosure?
When homeowners fall behind on mortgage payments, a foreclosure can occur. A foreclosure is a process in which a financial institution repossesses or sells a piece of property because of a loan default. Mortgage lenders usually consider a mortgage to be in default when the mortgage payment hasn't been made in three months. When a mortgage loan is in default, the mortgage lender can begin the foreclosure proceedings on the property. When the lender forecloses on the homeowner, the homeowner must move out of the house, therefore, losing all possession of the property and jeopardizing any possible equity that the homeowner may have in the home. There is a legal time frame, which varies from state to state, which determines how long the foreclosure process can take.
There are mainly two types of foreclosures: judicial foreclosure and non-judicial foreclosure. About a third of the states in the nation use judicial foreclosure. This type of foreclosure involves issuing a lawsuit against the homeowner. If the homeowner does not respond to the lawsuit, the mortgage lender wins the case and the home is put up for sale in an auction. A court official presides over this auction and sells the seized house to the highest bidder. The mortgage lender also puts in a bid during the auction. This bid amount can go up to the amount owed on the home loan. If no bidder surpasses the mortgage lender's bid, the mortgage lender gets the title to the home. If the bidding goes higher than mortgage lender's bid amount, then the winning bidder is issued the deed to the house.
A non-judicial foreclosure is a foreclosure that does not involve a lawsuit. The mortgage lender issues the homeowner a notice of default and a notice of its intent to sell the homeowner's property. The homeowner has a chance to stop the sale by paying the default amount owed or by coming to an agreement with the mortgage lender. This agreement may include setting up a repayment plan and being allowed the option of delayed payments for a specified amount of time. If the homeowner fails to stop the foreclosure, the house is auctioned off in the same manner as a judicial foreclosure.
A foreclosure can also occur without a sale. In a strict foreclosure, the title of the house goes directly back to the mortgage lender without the need to go through an auction.
Once the mortgage lender has the title to the house, it can sell the house through a real estate agent. Proceeds from the sale of the house would go towards paying off the default amount of the former homeowner's mortgage loan. However, if the proceeds of the sale are not enough to cover the owed amount to the mortgage company, a deficiency judgment is issued to the former homeowner. For example, if a home sells for $80,000 and the balance on the mortgage loan was $100,000, the former homeowner is still liable for the $20,000 difference (unless the former homeowner is insolvent). Deficiency judgments, as well as the foreclosure itself, could do severe damage to the homeowner's credit. In other words, a homeowner will lose his home if it is foreclosed on by the lender.
How do you stop foreclosure?
CDG Exclusive specializes in resolutions of mortgage delinquencies or home foreclosure claims on behalf of you, the homeowner. We perform a detailed financial analysis and work with you to establish your best alternatives. We review your lenders loss mitigation policies and your state's foreclosure law to make sure that we give you the best service within the context of your situation. By working with you, the homeowner, and your lender we can tailor a resolution to meet your specific criteria and financial circumstance.
How long do I have to act?
Time is of the essence when you are behind on house payments. Time is definitely not your friend in this situation. Each day that passes makes it that much harder to get an agreement worked out with your lender that you can live with. The home foreclosure process can take anywhere from a few weeks to months, depending on your state law and the method of foreclosure your lender chooses to use. There are many homeowners who did not even know that they had already lost their house! When you are ready to pick up the phone, please call us at (877) 842-8708 or send us an email at firstname.lastname@example.org.