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The Main Stages of Foreclosure Process

A foreclosure refers to a situation whereby a person’s home is auctioned off due to his inability to settle his mortgage borrowings. The foreclosure process is simple and is characterized by different processes. A home owner can avoid foreclosure at several stages during which he has a chance to pay up his loan.

The first stage occurs after about six months of missed payments. Here, the lender gets a Notice of Default (NOD) recorded at the County Recorder’s Office. The NOD serves as a warning to the homeowner that he has defaulted on his mortgage payments and his house can be foreclosed upon. This signifies a reinstatement period that goes on until 5 days before the property is auctioned off.

If the homeowner fails to have his delayed remittances cleared within 3 months, a date of foreclosing the home is established. The homeowner will be notified of this development through a Notice of Sale, which will also be put on the property. Moreover, the Notice of Sale is entered in the County Recorder’s entries and is published in the local newspapers in the county for 3 weeks.

The next stage is the foreclosure Trustee Sale. This is carried out on the county courthouse steps where the home is located. The Notice of Sale gives the time and location where this sale is to be carried out. At the sale, the house is auctioned to the highest bidder. The person who wins the bid must pay the bid in cash. He is required to pay a deposit and clear the balance within 24 hours after the fall of the hammer.

After the bid is paid in full, the bid winner will be issued with the property deed that shows he is now the legal owner of the property.

The above are some of the common stages that are followed in most states. However, it is important to note that some states have other different stages and requirements for placing a bid. It is important to get familiar with your states foreclosure process if you want to purchase a foreclosure property. Understanding the process will also help you to take advantage of foreclosure activities in your neighborhood.