Entries Tagged 'Foreclosure Process' ↓

That’s right, even when you’re losing your house someone is looking to profit from it by dinging you with foreclosure fees. It’s not enough that you’re losing your home, that the process is stressful and potentially embarrassing, but the lack of oversight in the foreclosure process also means that some places will try to squeeze a little more out of your wallet or pocketbook. If you are currently going through the foreclosure process, it pays to read this harrowing article on foreclosure fees in the New York Times.

In an analysis of foreclosures in Chapter 13 bankruptcy, the program intended to help troubled borrowers save their homes, Ms. Porter [associate professor of law at the University of Iowa] found that questionable fees had been added to almost half of the loans she examined, and many of the charges were identified only vaguely. Most of the fees were less than $200 each, but collectively they could raise millions of dollars for loan servicers at a time when the other side of the business, mortgage origination, has faltered.

While the individual steps involved in each of the steps in the foreclosure process are different in each state, the general process itself is the same. This article covers the foreclosure part of the foreclosure process, after the bank has accelerated your mortgage and demanded that the mortgage be fully paid. While this is often the point of no return with your current lender, all may not be lost - contact a foreclosure lawyer or expert as quickly as possible.

Steps In Foreclosure

1. Bank sends a notice of intent to foreclose to you by certified mail.
2. Bank files the necessary papers in court to begin the foreclosure process.
3. The required notices are published in local newspapers. This is not meant to be punitive, this is required by law.
4. At this point, there are still things you can do to avoid going to court, such as selling the house to someone else, but assuming these things don’t happen and the waiting periods for all the legal papers and notices expire, the process will enter a courtroom.
5. Court holds a hearing regarding the claim.
6. Court issues an order to foreclose.
7. The required notices of a foreclosure sale and any advertisements are published in local newspapers.
8. If again nothing is reached, the house is sold to the highest bidder at public auction.

All told, this process can take as little as 30 days (Alabama) to as long as a year (New York) and that length is one of the reasons why banks don’t want to go through with it. You may also notice that at no point are you evicted from your home, that’s because the foreclosure process doesn’t cover that at all. After the foreclosure, you are considered a tenant in the home and could perhaps arrangement to rent it from the new owners. If not, then the new owners have to follow the eviction process of your state which can also take some time as well.

There are numerous points in that process for you to reach a resolution with your lender but the longer you wait, the fewer the options. This is why communication with your lender is crucial if you want to stay in your house.

While the individual steps involved in each of the steps in the foreclosure process are different in each state, the general process itself is the same. Pre-foreclosure is generally the first phase of the foreclosure process and is marked by a borrower’s failure to pay and failure to reach any sort of compromise with the lender that satisfies the lender. Remember, banks don’t want to seize homes, but they have to protect their investments (the loan) by identifying when they can be a problem. Failure to make a payment is a problem because it represents a bigger problem, failure to repay the loan, so to resolve it the bank is seizing and selling the collateral.

Steps In Pre-Foreclosure

1. Borrower fails to make a mortgage payment.
2. Bank sends the borrower a late payment notice.
3. Borrower continues to fail to make mortgage payments.
4. Bank attempts to contact the borrower.
5. No arrangement is made and borrower is still delinquent.
6. Bank activates an acceleration clause and demands the mortgage be paid in full.

The last step, when the bank activates the acceleration clause in the mortgage, is the point of no return. If you haven’t talked to the bank before that step, talking to them now will probably not work because they’ve given you ample time to respond. This is why talking to your lender is crucial, they are willing to work with people who are willing to work, but if you don’t respond at all, you’ve shown them that you aren’t willing to work with them (even if it’s because you’re afraid) so they have to take drastic measures.