What is the process of mortgage foreclosure?


A delinquent borrower should be aware what is the process of mortgage foreclosure so as to be able to take appropriate measures if he chooses to defend.

The process of foreclosure begins with a Notice of Default up to six months after the borrower defaults. The borrower is informed of possible foreclosure taking place. They have the opportunity to reinstate the mortgage within three months (that is, become current on the loan plus paying the loan fees).

If that doesn't happen, the process of mortgage foreclosure continues with a Notice of Sale put on the property and in the local newspapers. The Notice of Sale contains information regarding when and where the foreclosure auction will take place.

The highest bid on the mortgage foreclosure auction wins and the bidder has to pay cash if they are not the first lien holder. Sometimes the first mortgage lender offers just as much as to cover all mortgage debt and foreclosure costs. If the mortgage foreclosure sale does not satisfy the incurred debt, the lender may file deficiency judgment or waive the remaining debt. If junior liens exist, the subordinate lien holders may file deficiency judgment, too, if foreclosure proceeds are not sufficient.

In any case, public mortgage foreclosure auction can be quite an unpleasant experience for the homeowner. Before you get any near to foreclosure, you'd better discuss options with you lender or with a legal foreclosure specialist who may be able to save you all foreclosure troubles by negotiating a new payment plan with your lender.

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