Understanding the Foreclosure Process
To navigate past a foreclosure successfully by choosing the right option to save a home, a homeowner must first understand the process. As with everything else in life, the more educated you are about a subject, the better chance you have to make the right choice. The foreclosure process is a complicated matter that depends on the details of the homeowner’s situation and state foreclosure laws where the home is located. It generally takes anywhere from two months to one year and follows this course:
- Pre-foreclosure: Late payment notices arrive in the mail and the lender/bank attempts to contact the homeowner by phone.
- Foreclosure Notice: The lender produces an official foreclosure notice which can be published in a local newspaper and posted at or near the home.
- Reinstatement Period: The time period before the auction or sale where a homeowner is able catch up on missed payments and any accrued penalties or fees.
- Sale or Auction: The home is sold at auction to an investor or the lender assumes ownership.
- Redemption Period: (Not available in all states) A final opportunity for a homeowner to buy back their property after the auction or sale by paying what the home sold for plus interest and any qualified expenses.
- Eviction: The homeowner must move out. If the homeowner refuses, a local authority forcibly removes the residents and their belongings from the property.
Once a homeowner understands the process, choosing the right option to avoid foreclosure becomes easier.