Process Leading To Foreclosure
When no monetary dealings are possible between the borrower and the lender or, when the borrower is can find no alternative way to repay the loans he had used for or against his property, it will then lead to foreclosure. However, foreclosure does not mean that the borrower gets thrown out of the house without prior notice. Only when there is judicial intervention can you be ordered to leave your house. The court implements a set of rules for foreclosures before evictions can be executed. ÿ
When a bank handles the foreclosure, the individual should find out from the bank when the bank will begin the execution for the foreclosure. Most of the time, it may take as long as 90 days for the bank to begin with the procedure. It is highly recommended to know the dates of the proceedings so that arrangements to move out in that span of time can be made possible.ÿThis is because finding a house that will fit the budget and moving out the belongings takes time.
A proceeding for the foreclosure begins when the borrower skips a mortgage payment and all other payments associated to the owned property. The financial institution or bank will first work out a solution with the borrower so that foreclosure can be avoided. Banks are known to find alternative methods such as settlements prior to enacting the foreclosure.
When the borrower still misses the payments and avoids contact from the bank, the bank will resort to legal action. The bank will first send a notification to the borrower regarding a demand for payment. This is based on the ?acceleration clause?. The ?acceleration clause? is a mortgage note that notifies the borrower that upon failure to make the repayments, the total amount that is due on the borrower, will have to be paid in total at call. It will also include the interest based on the calculation of the bank as per the terms of the contract. ÿ
Once the borrower receives the mortgage notice from the bank, it is high time for the borrower to contact an attorney. An attorney will guide the borrower with the legal formalities regarding the foreclosure. The starting point of a foreclosure is the mortgage note, which will be followed by a ?Notice of Intent to Foreclose? letter that is served by a sheriff representing the court. Once the notice is served and received, the borrower s expected to be in contact or meet up with the lender to work out a solution. If the borrower does not respond to any of the notices sent, the borrower is assumed to be deliberately missing the payments. The court will then give legal permission to the bank or lender to begin the proceedings of foreclosure. The bank is then required to announce the foreclosure of the property in the local media via advertisement. The advertisement will consist of dates for the auction and the type of property being auctioned. An auction ill then take place and the property is handed to the highest bidder. This is where it leads to the borrower losing his property over a loan that he couldn?t pay.
