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foreclosure FAQ's

Q – What is a foreclosure?

A – A foreclosure happens when lenders attempt to recover money that is owed to them when a borrower fails to make the mortgage payments as agreed based on the loan documents. If you borrow money by using a "secured loan", the property that you have offered as collateral can be lost in the event the loan is not repaid as outlined in the promissory note. A home is typically purchased using this type of "secured loan"; if the loan is not paid, the bank or lender takes the property to cover their potential loss.

Q – Does the bank have the right to kick me out?

A – No, is the simple answer, a court order is the only way to force you out of the home. However, in the event of a foreclosure the lender will follow proper procedures to have you evicted from the property.

Q – What are the steps in the foreclosure process?

A – All states have different laws pertaining to the process and procedure for foreclosing on a property. Many states have similar procedures for the foreclosure process. The basic flow of the procedure is outlined here. (It is advised that you speak to an attorney regarding your particular case, all foreclosures have a different set of circumstances)

1. Pre-Foreclosure
2. Missed payments
3. Notices sent by lender to collect past due payments
4. Lender will begins to attempt the default by phone and additional letters
5. Arrangements are not made and the customer continues to miss payment
6. The lender invokes the right to the accelerated the payment, and demands payment of loan in full
7. Still not payments being made, or arrangements made
8. Formal foreclosure process begins
9. Notice of Default is filed and delivered to by certified mail of the sheriffs office
10. Legal notices and filings begin, published in local paper or as required by law
11. Still no payment of arrangement with the lender
12. Waiting period expires
13. A local court hears the banks claim
14. Court grants the claim to the bank to foreclose on the property
15. Legal notice of the foreclosure is published
16. Property is scheduled for a sales date and advertised
17. Property sold at auction the highest bidder, in some case the bank

Q – What is the time period for the process?

A – Depending on the state laws, usually you have anywhere from six months to a year or more, in some states this process is very quick and in others it can take some time for this whole process to transpire.

Q – Will I have to move if the bank forecloses?

A- No, the foreclosure process is only a transfer of ownership, in some cases you may have the option to remain in the house even after the property is sold to the highest bidder. After the completion of the foreclosure auction, you become a tenant and the new owner has to follow the proper legal procedure to evict you from the property.

Q – What is the process of eviction?

A – This will vary from state to state, you should contact and attorney with experience in the field. In most cases, the owner of the property will file legal paperwork to being the process. This process is usually a set time frame that you have to leave the premises; otherwise, you will be removed from the property by local law enforcement.

Q – What is the time frame for the eviction process?

A – For the day you are notified until law enforcement shows up to move your possessions from the property can range from several weeks to 6 months of more, the average time is 8-10 weeks.

Q – Can I stop or prevent a foreclosure?

A – Yes you can, there are several things that you can do to stop or prevent the foreclosure process. Depending on the time of default, and your options are greatly reduced as the length of delinquency increases. The longer that you wait the fewer options you will have available.

Q – How long before I have no options?

A – Never, you have at least one option available until the end, unless you decide that you are done fighting. In some states even after the foreclosure and the eviction process, you have the right to buy your home back. In most cases, if you were not able to save your house before the foreclosure and eviction process, it is likely that you will never structure a deal to rebuy your home. If you had been able to save the house, you would have already done so.

Q – I am getting mail from people claiming that they can help me, where are the getting my address from?

A – The foreclosure process is a legal, public record that makes you name, address and other information publicly available. There are specific publications that relay this information to people that may be able to offer help in your situation.

Q – Can these people that send all this mail really help me?

A – There are a growing number of people that are trying to invest in foreclosures; this market is booming and the opportunity for investors and companies that specifically buy foreclosed homes. Investigate them thoroughly before making any deals or even starting the negotiation process, while some may be legitimate there is also a growing number of people that are not.

Q – How do I know which is the best option?

A – This may be the most difficult question of all, answering the question requires detailed information about you assets, income, expenses and circumstances surrounding your current situation. The best solution will depend on the type of mortgage that you have, and where in the foreclosure process you are when you make the choice to save your home.

Q – Is there anyone that can help me decide which option is best?

A – There are a number of different types of companies that can assist you; a law firm may be the best starting point. Find a firm that specializes in foreclosures, not a law firms are able to assist homeowners facing a foreclosure. Finding a group that specializes in reinstatements is not easy to do, but there are firms that can help. Find one that you can talk to and get help as soon as you can. The faster you get help the better off you will be when dealing with the lender.

Q – Can you tell me how most cases are settled?

A – Not all cases are the same, not all situations are the same. Past statistics have shown that up to 40% of the homeowners refinance, approximately 35% file a chapter 13 bankruptcy, about 20% reinstate their existing loan, and the rest get help through a professional negotiator.

Q – What happens at a foreclosure sale?

A – Most sales, are quick and do not take long. The auctioneer will give a legal description of the property and read various legal notices, and then the bidding process begins. The highest bidder wins the property and the county sheriff's office or recorder files paperwork to transfer ownership.