The Foreclosure Process

Note: The following is a generalized breakdown of the foreclosure process. Each foreclosure is different and may not hold to these exact timeframes.

If you are currently facing foreclosure or are experiencing trouble in making your house payments, contact Cabrey Lane Properties today for a free and confidential appointment to discuss your options.

Foreclosure Defined

A typical foreclosure occurs when a property owner cannot make principal and/or interest payments on his/her loan, typically leading to the property being seized and sold at auction or on the MLS by a local Real Estate agent.

Stages of Foreclosure

The foreclosure process is not very difficult to understand. There are several stages during which the homeowner has an opportunity to bring the loan current and avoid foreclosure.

After about 30 days to 3 months of missed payments, the lender orders a trustee to record a Notice of Default (NOD). At the County Recorder's Office. This puts the borrower on notice that he or she is facing foreclosure and starts a reinstatement period that typically runs until five days before the home is auctioned off.

If the default isn't corrected and paid current within three months, a foreclosure sale date is established. The homeowner will receive a Notice of Sale, and this notice will also be posted on the property. In addition, the Notice of Sale is recorded at the County Recorder's Office in the county where the property is located. Finally, this Notice of Sale is also published in newspapers local to the county in question over a three-week period. Upon such time, you will notified that your house has been foreclosed on. You must vacate the premises immediately. Failure will result in the county Sheriff physically evicting you from the property.

The foreclosure Trustee Sale typically occurs on the steps of the county courthouse in which the property is located. The time and location of this sale are designated in the Notice of Sale. At the Trustee Sale, the property is auctioned in public to the highest bidder, who must pay the high bid price in cash, typically with a deposit up front and the remainder within 24 hours. The winner of the auction will then receive the trustee’s deed to the property. When a home is upside down, it is typical for no bids to be placed on the property and the property automatically reverts to the mortgage note holder (your mortgage company).

If there is equity in the property when it goes to auction, the winning bidder receives the equity. Once the bank takes possession of the property they will begin to market it as a REO. (Real Estate Owned property) Upon successful sale of your property, the bank will more than likely have a deficiency between what you originally owed and the final Net disposition number. The Bank has a legal right to obtain a deficiency judgment for the difference. At this point, they can garnish your wages.