Home foreclosures can happen for numerous reasons, however in the end, banks must foreclose on a home because a borrower can’t or won’t make his monthly payments. Foreclosure rarely comes as a surprise, given the reality that their are multiple attempts made by the lending institution to encourage the borrower to bring the loan up-to-date before allowing the foreclosure to proceed.
Notice of Default
If you miss a mortgage payment, your lender will send you a letter reminding you that the payment is expected and requesting one to make it up. This original letter is known as a”notice of default” and will tell you how much you are behind and the way to renew your loan to current status. If possible, this is the very best time to make things square with the mortgage provider to be able to keep from falling too far behind and also to prevent late penalties from accruing. The lender does not want to take possession of your home any more than you want to give it up. Call them immediately and ask what can be done to avoid the mortgage from becoming delinquent. They will sometimes allow borrowers to miss a payment or two and tack those payments to the end of the loan or will otherwise restructure the home mortgage.
Notice of Acceleration
A notice of acceleration is required by law to provide you with the chance to pay your loan balance so as to prevent foreclosure. By the time you get this notice it might be too late to ask the lender to make alternative arrangements with you, so be sure you attempt to work out a payment plan before this point. In short, a notice of acceleration is the bank’s method of declaring they are dedicated to foreclosure and intend to take ownership of your home unless you pay the entire loan balance in full within 30 days.
Notice of Sale
Once the creditor has established a date and time for the auction of your property together with the courtroom, they are required to send you a notice of sale. As of the selling date you will no longer have any legal claim to the home so that you won’t have the ability to sell it to a third party or through a short-sale to keep the foreclosure. If you have found a third-party buyer you have to close on the house before the foreclosure date or convince the lender to postpone the date.