Question: What is foreclosure? – Foreclosure is a legal process in which the rights to a property is taken away from the owner and the property is then sold to satisfy unpaid mortgages and liens against the property.
Question: When do foreclosure proceedings start? – Answer: In most cases, foreclosure proceedings are started when payments become delinquent.
Question: How many payments can I miss before my lender puts my property in foreclosure? – Answer: It depends on what type of loan you have. Your mortgage contract should state how many payment you can miss before a Notice of Default is filed and sent to you.
Question: Who can foreclose on my property? – Answer: Mortgage holders and other lien holders who have a vested interest in loans on your property, which is used as collateral, can foreclose on you.
Question: What about tax liens? – Answer: A tax sale can take place if you get behind on your property taxes. The tax sale can be initiated by federal, state or local taxing agencies.
Question: From the time I become delinquent on my first payment, how long does it take to complete the full foreclosure process? – Answer: Different types of loans have different time frames. The foreclosure process for FHA and VA loans usually take longer than that for Conventional loans.
Question: How will I know when the foreclosure process begins? – Answer: Once foreclosure proceedings are initiated, a Notice of Default will be recorded at the County Recorders Office in the county in which the property is located and you will be notified by regular mail and by certified mail.
Question: How much time do I have after a Notice of Default is filed? – Answer: Normally, it is ninety days plus twenty to twenty five days for publication. But it would be wise to read all correspondence carefully, and or contact an attorney, to make sure what your rights are and what the time frame is in your situation.
Question: Can I stop the foreclosure sale? – Answer: Yes. You can bring your mortgage payments current along with all late charges, foreclosure fees, taxes, and insurance premiums. If you are unable to do so, you can contact your lender and try to negotiate a plan to modify your payments but don’t wait until the last minute to do this. Other options include refinancing, selling your home and or filing for bankruptcy.
Question: If I file bankruptcy, how will that help me? – Answer: Bankruptcy will stop the foreclosure proceedings and give you time to work out a plan through the courts.
Question: If I lose my property through foreclosure, can I get any money from the foreclosure sale? – Answer: Yes. But first, any remaining balance on the mortgage will be paid along with all outstanding property taxes and court fees. In most cases, very little, if any money, will be left for you to get.
Question: How much time is given to vacate the property once the foreclosure process is completed? – Remember, once the Trustee’s sale is complete, the title to the property is given to the new owner and your rights to the property are gone and the new owner gets immediate possession. Note: Foreclosure is a serious matter and it is advisable to contact an attorney for legal advice.
Q1: If the property is in pre-foreclosure, how do I buy before foreclosure? – Answer: When a property is in pre-foreclosure (NOD, LIS), the owner still has a chance to stop the foreclosure process by paying off what is owed or by selling the property. The pre-foreclosure period can last several months, so you may need to be patient when trying to contact the owner in default.
Q2: How can I buy an auction property? – Answer: After a property owner misses several mortgage payments, the owner has a pre-foreclosure grace period of a few weeks to a few months — depending on the state — to bring the payments up to date and stop any foreclosure proceedings. If the owner does not bring the delinquent payments up to date during the pre-foreclosure period, the property will be sold at a public auction.
Q3: How do I buy bank-owned REO properties? – Answer: The lender/bank has taken ownership of the property, either through an agreement with the owner during pre-foreclosure or at the public auction. The lender usually sells the property to recover the unpaid loan amount. The lender typically clears the title for any buyer, but the potential bargain is often less than a pre-foreclosure or auction property.
Q4: How do I buy property I see posted on RealtyTrac? – Answer: How you go about buying a property posted on RealtyTrac depends on the property status. If the property is For Sale By Owner or a Resale Home, you would approach the owner or the listing agent to make an offer. If the property is in foreclosure, the process of buying will differ from the typical real estate purchase.
Q5: How do I contact the lender to buy a bank-owned property (REO)? – Answer: If the property is Bank Owned (REO), your first step is to contact the bank, called the lender on RealtyTrac’s Property Details page. The lender now owns the property. You should ask for the lender’s REO department or bank-owned property department to proceed with possibly buying the property.
Q6: How do I check property liens, value and equity? – Answer: Additional liens against a property (these can include delinquent taxes) can be researched several ways.
Q7: What are foreclosures and how do I learn more about buying foreclosures? – Answer: Foreclosure is a legal process that allows a lender/bank to sell or take possession of a property due to non-payment of a loan that is secured by that property. RealtyTrac posts properties that have already been foreclosed (Bank Owned) and properties that are in the foreclosure process (Pre-Foreclosure, Auction). Buyers have three opportunities to purchase property during foreclosure. Buying Pre-Foreclosure, Buying at Auction, Buying Bank Owned (REO)
Q8: How does RealtyTrac help me pursue and buy properties once I subscribe? – Answer: Although RealtyTrac is not an agent or broker directly selling properties, RealtyTrac has several tools and resources available to subscribers to assist in pursuing any property listed in the RealtyTrac database. We are continuing to add features to make the site more useful to buyers. Explore: What RealtyTrac provides you
Q9: What does the dollar amount listed on RealtyTrac mean? – Answer: The amount listed on RealtyTrac is usually based on the defaulted lien amount or the transfer value. Called the Balance or Opening Bid on RealtyTrac, the defaulted lien amount is what the foreclosing lender needs to break even. If our data sources don’t provide that amount, then we use the Trans Value, which is the amount paid for the property when it was purchased by the owner in default. This is not the asking price for the property; it’s a starting place for you to begin your negotiations with the seller. The goal is to get a good bargain, but you shouldn’t necessarily expect to buy the property for just the defaulted lien amount. Either the defaulted lien amount or the transfer value gives a good estimate of what is needed to satisfy the lender. If you subtract this amount — and any other liens against the property — from the estimated market value of the property, you will have a good idea of the potential bargain that could be realized with the property. This will also give you a solid foundation for making an offer to the seller. Subscribers can use RealtyTrac’s Xamine Worksheet to calculate a property’s potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What’s Next>Evaluate The Property, which is located in the upper right corner. If you work with a real estate agent — recommended for first-time foreclosure buyers — the agent can provide professional advice on the value of the property and how much you should offer. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property. If you don’t see the Balance, Opening Bid or Trans Value on a property, you should check if RealtyTrac has other records for that property. Subscribers can click the History of Notices link on any Property Details page to view a list of data records RealtyTrac has for that property. Other data records may have more details about the property that were not on the original Property Details page. Subscribers can use this tool to check if previous foreclosure notices have been filed and if more than one lender is foreclosing. If RealtyTrac is not able to get the Balance, Opening Bid or Trans Value, then we may base the Amount on the Default Amount or the Assessed Value. The Default Amount is the amount the owner in default is behind on mortgage payments and will only display for pre-foreclosures. This is typically 3-4 months worth of back-owed payments to the lender/bank. The Assessed Value is the amount the county property assessor has valued the property for the purpose of levying property taxes. This is a good number to look at, as long as you understand that the assessed value may not actually equal the market value for the property. You can contact your county assessor to find out how to put the assessed value in context. If the amount in any of the fields is N/A or TBD, it means RealtyTrac was unable to find enough information on that property to come up with an estimate of the amount.
Q10: How do I find the market value for a home? – Answer: For subscribers, RealtyTrac provides Estimated Property Market Values on the Property Details page of property posted on RealtyTrac. The Property Details page also includes tax lien and bankruptcy information. Register for a 7-day free trial subscription to get full access to RealtyTrac’s property data and services. If you’re not a subscriber, you can order an automated valuation report from RealtyTrac to find the market value of a property. Go to our Property Reports Matrix to view samples and order reports that will help you research market value and transaction history. Market value is an estimate of what the property will sell for on the current real estate market. Keep in mind, when determining the final offer you want to make on the property, you will need to balance the market value with any liens against the property and estimated repairs. Subscribers can use RealtyTrac’s Xamine Worksheet to calculate a property’s potential bargain based on market value, outstanding liens and repair costs. Subscribers can also use Xamine to check if a property is listed with a real estate agent. On any Property Details page, click What’s Next>Evaluate The Property, which is located in the upper right corner. If you work with a real estate agent (which is recommended for first-time foreclosure buyers), the agent can provide professional advice on the value of the property and how much you should offer. Contact an Agent to find a local real estate agent in the RealtyTrac Agent Network who can help you buy a property.
What is a foreclosure? – A foreclosure is a legal process where the bank or other creditor takes control of the collateral for a promissory note in default. This collateral is a parcel of real property, and the lender either sells or repossess this property. The process is slightly different from state to state, but there are basically two types of foreclosure, judicial and non-judicial. The type of foreclosure depends on the state. In a mortgage state, the foreclosure used will be a judicial foreclosure and in a deed of trust state, non-judicial foreclosure is used. Florida is a mortgage state, therefore judicial foreclosure will be used. We’ll cover both of these foreclosure legal proceedings in this article.
What is judicial foreclosure? – Used in about half of the states in America, a lender (“mortgagee”) brings a lawsuit against the borrower (“mortgagor”) to get the property. About half of the states use judicial foreclosure. Like all lawsuits, it starts with a complaint and summons to the borrower. When in judicial foreclosure, what happens if the borrower doesn’t file an answer to the lawsuit? In this case, the lender gets a judgment by default. The court then appoints a referee to find the total amount due, including interest and attorney’s fees. Then the lender must put out an advertisement of notice of sale in the newspaper for four to six weeks. If after this process the total amount is still not paid, then a public sale commences, headed by the referee, on the courthouse steps. The lender then must advertise a notice of sale in the newspaper for four to six weeks. If the total amount due is not paid, a public sale is conducted by the county sheriff or another officer of the law on the courthouse steps. Banks and other lenders usually bid up to the amount of the owed debt at the sale. Unless there is significant equity in the property, the only bidder at the sale will be a representative of the lender. If no other buyers bid, then the lender receives title to the immovable property in return. If the proceeds of the sale still do not cover the amount owed, then in some states the lender may issue a deficiency judgment against the borrower and all others that guaranteed this loan. This entire process can take sometimes as little as three months and as long as twelve months, depending on the volume of court cases.
What is non-judicial foreclosure? – Commonly called “power of sale”, this allows a lender to foreclose without a lawsuit, which is permitted by most states. Instead of a mortgage, the grantor (“borrower”) gives a “deed of trust” to the trustee to hold for the lender (“beneficiary”). When the grantor defaults, the lender files a notice of default and a notice of sale, published in the newspaper. This process takes only 90 days.
What is strict foreclosure? – Not a common procedure, a strict foreclosure does not require a sale. Once the proceeding has begun, the borrower has only a certain amount of time to pay what is owed. After this time, the title reverts to the lender. Strict foreclosure has been seen in many Oregon and California cases, usually taking place regarding land contracts.
What is “reinstating the loan”? – This is when a borrower can “cure” the loan before the date of sale. Many states permit this. This requires the borrower to pay the amount in arrears, plus attorney’s fees and interest. This is a better proposition for the borrower, since the amount in arrears is usually much less than the entire principle balance, which occurs when the lender accelerates the debt. Most states have laws requiring a reasonable notice to the borrower before the acceleration takes place.
What are redemption rights? – These is when the borrower has the right to “redeem” what is owed and get title to their property after the sale. This is not available in all states and the length of this period varies. When the redemption period is long, investors purchase the junior liens on the property so that they may have the right to redeem the property from foreclosure. Whoever holds the most junior lien has the last right to redeem the property by paying the underlying liens. The highest right is reserved for the owner. By obtaining a quitclaim deed for the owner, you have the right to redeem the property yourself.
Q: What does it mean to be in foreclosure? – A: According to dictionary.com, to foreclose is to deprive (you) the mortgagor of the right to redeem mortgaged property, when payments have not been made. When you have missed two months worth of payments you have defaulted on your loan, but you are not yet in foreclosure. The foreclosure proceedings will not initiate until the mortgage lender or bank submits paper work to a prosecuting attorney.
Q: What are my options? – A: Once the mortgage lender sends letters informing you of the Foreclosure it is important that you keep your head up; find a way to fix things. Immediately start considering your options of another loan, refinancing, etc. On the other hand, if you know you are in over your head then selling is always an option. To keep from falling deep into the foreclosure process it is really important to weigh out your options, looking at your finances and what you can afford in the future.
Q: Who do I turn to? – A: You can talk to your mortgage lender about your options with payments adjustments, another loan, etc. If you decide to sell the house, there are always local investors who can help you get your feet back on the ground. If you decide to sell your home make sure you are getting help from credible sources and of course don’t ever sign anything before reading it.
Q: If I am in foreclosure, how much time do I have until I have to leave the house? – A: Laws vary from state to state; in states like Georgia a foreclosure house for sale is advertised to the public only seven days after being filed. However in other states, the house is not publicly advertised until the 130th day of the foreclosure process. If you look online or go to the library and look up your state legislature, you will find a slue of detailed statutes. Do some research so you know exactly what timeline you are dealing with, but the bottom line is to act as quickly and wisely as possible.
Q: Does the lender have the right to repossess my house, even though I have been paying for it all this time? – A: Unfortunately, yes. Even though you only missed those few payments and had paid so many others, the mortgage documents or deed of trust (depending if you live in a judicial or non-judicial state) gives the lender the right to foreclose and repossess the property after you have defaulted on payments for a certain length of time.
Q: What is refinancing and how can it help me out of foreclosure? – A: By refinancing you are essentially taking another loan. The new loan is based off a new appraisal of your property. One benefits of refinancing is that you can sometimes get a lower interest rate, in turn, decreasing your monthly mortgage rate. However, refinancing is not for everyone. It can also put you at higher risk for foreclosure depending on a number of factors. Really do some research and talk to someone who can advise you well on this option.
Q: If I lose my house in foreclosure are my chances of buying again lessened? – A: If you apply for a loan on another house your past foreclosure will show in your credit history. This does not mean you will not qualify for a loan; however you are less likely to receive, for instance, a low down payment loan. It is very important to stay informed and knowledgeable in how to stop the Foreclosure before it happens. There are people who are willing to take the time and help.
Q. “When the lender forecloses you have to get out right away, right?” – Ans. In Michigan when you miss your payment is 30 days past due you are in default, usually by the time a homeowner has missed 3 payments the bank and the collection department have been in contact(Note, return or answer those calls, they will try to work it out with you and possibly you will come out of it okay, it is better than going to foreclosure). At 90 days the loan is in serious default and the legal system begins to take over. Notice is served on the property by a posting on the property. In our area it is usually a notice tacked or stapled to the property by a deputy of the local sheriff. The “Sheriff’s sale takes place in 30 to 45 days at the law center or court house, not at the property. The “buyer” usually the bank, then has to wait for 6 months (in cases where acreage is involved it can be 12 months) to take physical possession of the property, this called the remeption period. It is a time that you could rescue the property by paying it off.
Q. Can I still live there after the Sherrif sells my house? – Ans. Yes, until the redemption period is up you can live in it. But if you move out, the lender may be able to accelerate the foreclosure period and take the property back quicker because the property was “abandoned.”
Q. “I have heard that the bank can take all of my property and even my retirement too, is that true?” – Ans. No. They can only foreclose on what they have in the mortgage. No more, no less.
Question: What happens, do I pay my house payments during the foreclosure? – Ans: No. Not unless you and the bank come to some kind of agreement like a mortgage loan modification and you agree to make the payments on time. Remember they, the lender is in the process of taking it back. The only thing they will accept technically are the total of the fees and costs plus the principle along with accrued interest for payment in full. Recent experience indicates that some lenders will “deal” on some of that and perhaps roll it into the mortgage.
Q. How does a foreclosure affect my credit? – Ans. Well, it is serious. The lenders I have spoken with tell me it will be about a 400 pt hit on you credit score. Really foreclosure is the last resort. There are a number of things that can possibly be done before you get to that point.