Many homeowners assume that foreclosure process is the literal seizing of a property after the buyer misses a few payments. It can involve that, however it’s more complex than that. Foreclosure is a process that can take months to occur and along that pathway, the buyer has options that can possibly stop a foreclosure from occurring. This blog discusses the process that leads to foreclosure.

The Start of the Foreclosure Process – Missed Payment

When the buyer misses even a single payment, the process of foreclosure begins. You are notified that you have missed a payment and the lender may allow you the opportunity to make your loan current. If you miss more payments the process begins to intensify.

Options:

• Contact the lender and make arrangements to bring the loan current.
• If more than a few payments are missed a payment plan may be agreed upon.
• Start the process of a short sale for the house to be sold
• If a hardship is a cause, work with an attorney to save the house.

Notification of Default – Four Months in Arrears

When you miss three or four payments, a notice of default is sent to the buyer. It is the gateway to legal foreclosure and the buyer has 30-days to bring the loan to a current paid status.

Options:

• Contact the lender and pay the loan current
• Set up an agreed-upon payment plan that will bring the loan current by an agreed-upon day – can be longer than 30 days.
• Start the short sale process and seek legal help if the lender is not working with you.
• Talk with a foreclosure attorney to discover your rights and options under state and federal foreclosure laws

The Notification of Sale

The lender files forms with the court asking that the foreclosure be approved. If the court approves, the lender will begin the process of selling the property. This is usually an auction format and the lender must advertise the property including a minimum bid.  The minimum bid is usually only 2/3rds of the appraised value of the home. 

Options:

• Do nothing and the house will sell (usually for less than you owe, creating a deficiency that you’re still financially responsible for)
• Contact an attorney and try to stop the foreclosure
• Learn more about your rights under Ohio and Federal foreclosure laws. Even at this stage, a property can be saved from foreclosure.

The House Is Available For Sale

The sale begins and the public may begin making bids or offers on the house. In an auction format, the property is sold to the highest bidder at the end of the auction. If you are still living in the house, the new buyer will have control over how long you are allowed to stay. The new buyer is granted immediate possession.

Confirmation of Sale

Once a sale takes place, the court will review the sale.  If the home does not sell for enough to pay off your loan, the court may grant a deficiency judgment which will allow the bank to initial collections to come after you for the remainder of the debt.

Eviction

Whoever purchases the home at the auction will than start the eviction process.   The local law enforcement organization that handles eviction will oversee the process. You may have only several days to pack and move.

Call Cozmyk Law Offices Today To Help Save Your Home!

If you are a home buyer and facing foreclosure give us a call at (877) 570-4440 to learn more about your rights and the options available to save your home.