There are not a lot of people that think about the possibility of losing a house to foreclosure when they first purchase the home. The process of foreclosures is not something that happens right away and in the following article we will talk about the various steps that a lending institution can take during the process.
When you go through the steps of purchasing a home, few hardly think about the nightmarish process of losing a house to foreclosure. The foreclosure process does not happen immediately and this article will help you understand what the exact steps the lending institution needs to take from missed payments to eviction. The length of time varies from state to state, so be sure to check with a HUD counselor to know the details of your situation.
Missed Payments
Most banks will not call or notify you about any problems until you are at least 30 days behind on your mortgage, but it is a good idea to call them as soon as you know you are going to be late so you can work on some sort of payment arrangement, and also to help build trust. Lenders will typically be more forgiving if you notify them as early as possible that you are having issues with the payments, and they are more likely to work with you. At this point in the process the only thing that is going to happen is your credit score is going to go down because you are late with your payment.
Notice Of Default
At around the ninety day mark in which you have missed 3 consecutive monthly mortgage payments, the lending institution will give you a Notice Of Default. This is the first step towards foreclosure which makes this document extremely important. Within the document, it will state how to make the loan current again.
Time Before The Auction
In the months leading to the auction, the lending institution will publicize the sale in order to sell the house. Even though a date may be set, again, you can still turn things around. Once the foreclosure process has started, it is definitely more difficult to talk to your lender about putting together some type of payment plan.
The good news is that even if the bank will not work with you that you can still get help from the Federal Housing Administration. You can get a hold of a counselor from either HUD or the FHA by calling their help line at 800-CALL-FHA (800-225-5342). If you qualify for one of the plans being offered you could get a loan, or some other form of assistance, to help you get moving in the right direction on your mortgage.
A foreclosure is not only a painful process but it will all but destroy your credit rating for several years making it very difficult to get any sort of credit. This is why it is better to try and sell your house fast to try to avoid the foreclosure. The process of a selling to a real estate investor through a short sale is something that a lot of people do in order to try to avoid foreclosure.
Remember that in most states you are still in possession of your home right until the day of the auction. Thus, you can remain in your home until the deed changes hands.
Eviction
As just mentioned you will be able to stay in your home until the new owner has taken possession of the deed to the property. The eviction process is totally different from the foreclosure process and is governed by a whole different set of laws. Make sure that you talk with either an attorney or real estate lawyer to make sure you know what is going to happen during this part of the process.
Redemption
In some states, you are given a period of time in which you can reacquire the loan and the home. The Right of Redemption is about a year in most places, and you can talk to a real estate attorney about the details.
Issues With Credit Rating
Finally, the aftermath of a foreclosure is a ruined credit rating. In some cases it can be more than seven years before another lending institution will allow you to secure a loan. A more pressing concern may be whether a landlord is willing to sign you on a lease. Most landlords can overlook the poor credit rating if they are paid several months of rent in advance, so be sure to save money as you go through the steps of foreclosure.
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The process of selling your home can be a very complicated thing, and if you have distressed homes in your area it will make it even harder because they can lower the value of your house. Sadly, in today's market, it is a very real possibility even if your house is in great condition, if you are in an area that has a high number of foreclosures and short sales, that your house will suffer right along with those houses.
What Repairs Should I Make To Get The Highest Return On Investment
You can tell that home repairs shows have been gaining in popularity due to the large number of shows that show off expensive, over the top repairs. Even if the upgrade is able to get the buyer to say wow the real question is if the expense will actually garner you more money? You do not want to put lots of cash into upgrading something only to find out that you have actually caused your home to be less marketable to home buyers.
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A For Sale By Owner, or FSBO has been in the real estate industry for a long time now, but has been increasing in popularity. In days past you could only sell your home if you were using a real estate professional like a broker, Realtor, or agent. But with the size of the commission fees a lot of people are deciding on going with a FSBO and doing more of the work themselves.
