Useful Information for Preforeclosure You Need to Know
A home is said to be in a preforeclosure if the lender files a notice of default against a borrower for failing to make payments towards his mortgage loan. A home will remain in this situation for at least three months or depending on the decision of the lender. When a homeowner receives a notice, he or she should know that foreclosure is eminent and that failure to act immediately may result in a foreclosure.
You should contact a realtor or a real estate agent to know more about foreclosure. Essentially, a foreclosure is a home which has been foreclosed and is now owned by the lender. Such homes will be listed by the lender through a listing agent. A foreclosed house may or may not result in a short sale. In a short sale, the owner offers the house at a much lower price than the amount of mortgage owed to the lender. A short sale may take a few months to close, if ever they will close.
Pre-Foreclosure Sale Procedures
There are three major procedures that must be completed before a foreclosure sale takes place in a public auction. They include default, redemption and trustee sale. During this process, the lender, who holds a lien on your home is effecting the lien by offering your property for a public auction to pay off the lien or the outstanding loan. Each state has its own timelines when such a sale should take place. During this time, a homeowner may choose to sell his home, enter a new agreement to restructure the loan or redeem the mortgage by paying it off in lump sum or in part.
Default The lender can decide to initiate a foreclosure process when he or she deems fit, especially after you default. You will be said to be in default if you fail to pay your monthly payments for more than 30 days. The mortgage lender may enforce a lien by notifying you that you are in default and that a foreclosure process is likely if you do not correct the situation. The default notice must be send to relevant bodies such as the court and any other parties that may have an interest in the property under lien. The lienholder will be required to wait for your response for at least three months before any further action is taken.
Redemption of the Lien
Do not worry or rest hopeless that your home has been foreclosed once you get a foreclosure notice. The good news is that you still can exercise your right to redeem the lien by paying your entire debt obligation. Simply put, you can redeem the lien by ensuring that the outstanding or late payments are updated plus all other penalties or charges arising thereof. The reason why the law provides that the lender waits for three months before taking any further step is to help the owner of the house to make up for late payments and to keep his or her home.
Notice of trustee Sale
This is the third and the last step in a preforeclosure process. Here, the lender is expected by law to publish the notice of tustee sale in the daily newspaper or a public website, and a similar notice of the intention to sell on the property itself for at least 20 days before the actual date of sale. The notice must include the date, venue where the sale will take place and the time of sale.