Steps of Foreclosure: The Six Steps of Foreclosure

In some states, there will be 50% more foreclosures in 2008 than there were in 2007. And, last year was a record year.

But the actual foreclosure is something that happens toward the end of the steps of foreclosure. In between, many homeowners are able to rescue their homes.

This is your guide to the steps of foreclosure

First, if you fail to make a mortgage payment or two, you are in danger of facing foreclosure.

People can fail to make mortgage payments for a variety of reasons. Historically, some reasons for missing mortgage payments have included major medical problems, lost job, and family emergencies have been the reason for most mortgage failures.

But recently, the number one reason for homeowners failing to make their mortgage payments have been exploding adjustable rate mortgage rates.

The second step is for the lender to send out a Notice of Default. The NOD lets you know that the legal proceedings have started.

When you get a NOD, you need to call with the lender right away. Start the lines of communication. That way, when you move on to step three, you have a good chance of actually saving your home.

After that, you have a period of time – anywhere from 45 to 180 days to make up the deficiency. You can make up the deficiency in a number of ways:

1. Pay back the arrears
2. Enter into a short sale
3. Discuss the possibility with the lender of a Deed in Lieu of Foreclosure
4. Sell the house if it’s worth more than you owe
5. Change the terms of the mortgage

If you are able to make up the debt, your problem goes away.

If not, it’s on to step four: foreclosure. This is the legal taking of the house. In some states, this is through Judicial means while other states have non-judicial formats.

At that point, the next step is to have a Sheriff’s Auction. The sheriff will auction off the home on the steps of the county courthouse. Usually, the bank buys the house for $1 over the amount of the debt, though sometimes investors get involved.

In most states, the final step is to offer the original homeowner the option of buying the home back from whoever won the auction. This is called the redemption period.

If you are looking to rescue your home from foreclosure, it is useful to know what the steps of foreclosure are and what you should be doing during each one. That way, you won’t be a sad statistic in 2008.

Article Source: http://bestinfobay.com

Distressed homeowners need information and they need it as soon as possible. If you’re facing foreclosure, get your copy of The Foreclosure Survival Guide now. This resource is absolutely free. Go to www.foreclosure-survival-guide.com today.

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