Foreclosure FAQs

Homeowners across America have many of the same questions about foreclosure as you. However, each foreclosure proceeding involves specific factors that will influence the options available to homeowners in a uniquely. Some of the factors that can make each foreclosure different include:

  • The state of the foreclosure proceeding
  • The amount of equity retained in a home versus the outstanding debt obligations
  • The specific terms and clauses in a mortgage agreements with a lender
  • The type of mortgage lender
  • The amount of other outstanding debt obligations, aside from a mortgage, that a homeowner owes

These are just a cursory look at the factors, which will also include the desires and needs of the individual homeowners themselves as well. Below are just a number of some of the most frequently asked questions regarding foreclosure proceedings. For consummate and comprehensive information regarding your individual foreclosure case, speaking with a real estate attorney from your area is the best option for gathering more information, making the right decisions, and avoiding foreclosure scams.

What is foreclosure?

A foreclosure is the process of obtaining a piece of property, usually a home or motor vehicle, to pay off a debt to a bank or financial company. The process of foreclosure takes place with court ordered documents.

What documents are needed for foreclosure?

Anyone involved in a foreclosure must provide the trustee with a note and deed of trust, any modifications or extensions of agreements made and any additional notes. All of the documents given to the trustee must be original. If any original documents are lost, an instrument bond will need to be provided. The trustee must also be provided with some essential information such as the unpaid balance, the reason for the default, information on advances, the date to which the interest is paid, the last known residence and the address of the property.

How long does foreclosure take to complete?

Foreclosure is an important process within the real estate industry and, without any problems, can take approximately four months to complete. Most foreclosure processes also require a notice-of-sale to be published in public for at least 20 days prior to the sale date. If there are any problems encountered during the process, foreclosure can take anywhere from four months to one year to complete.

Who pays the foreclosure fees?

Foreclosure fees and costs are paid by different parties of the foreclosure depending on how the foreclosure takes place. If the loan is paid off, the borrower is responsible for paying the fees and costs to the lender. If the property is sold to and outside bidder at an auction, the bidder is responsible for paying the foreclosure costs and fees. If the lender is the buyer of the property at an auction, they become responsible for the fees and costs. Once they resell the property, they will then regain the money spent on the fees.

How is foreclosure affected if the borrower is bankrupt?

A borrower can file for bankruptcy to avoid foreclosure. The trustee cannot proceed any further in the process of foreclosure once notified of the borrower filing for bankruptcy. If the trustee continues with the process and sells the property without knowing that the borrower filed for bankruptcy, the sale becomes null and void. If the trustee wishes to continue with the foreclosure process the lender of the loan must obtain relief from the bankruptcy court.

If I miss my mortgage payments, what can happen?

If you miss your mortgage payments, there is a possibility that foreclosure can take place. This means you would lose your house to the lender and have to move out. If the value of the house does not meet the value of the loan, you would need to also owe the lender an additional amount of money, a debt.

What are the alternatives to foreclosure?

There are a couple of alternatives to foreclosure. Your lender might be able to readjust the payment plan on your loan based on your financial standpoint or the lender could also suspend the payments temporarily or reduce them. Borrowers can also attempt to extend the term of a mortgage loan or have the mortgage refinanced. Another option to avoid foreclosure is to obtain an interest-free loan to bring a mortgage current. One option that is becoming popular is a pre-foreclosure sale. Sell your house or piece of property before foreclosure to avoid foreclosure and to avoid any damage to the credit rating.

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