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Stepping In The Middle Of A Preforeclosure Procedure

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By : Jacquelyn Marks    99 or more times read
Before a property is considered amongst the foreclosed listings, it undergoes a preforeclosure process. This is the time when the status of the property changes from being owned to repossessed.

Preforeclosure gives the current homeowner the chance to save the house from being reacquired by the mortgage lender. If your house is under this condition, there is enough time for you to settle any outstanding obligation to gain back ownership of the property.

You can step in and purchase a house while under this status. However, there are four different procedures to understand in any foreclosure.

  1. Strict foreclosure. This is the basic meaning of a foreclosure. As soon as the borrower consistently fails to fulfill his or her obligations to the lender, the latter automatically lays claim to the property.

  2. Public Sale. Commonly termed as judicial foreclosure, this procedure is facilitated by the courts. It determines how and where the foreclosure proceedings will pursue.

  3. Non-judicial foreclosure. A foreclosure by power of sale, this procedure may differ in each state but most allowed if this particular clause is mentioned in the mortgage or deed of trust.

  4. Foreclosure in deed in lieu method. A negotiable instrument such as a deed is used to guarantee that all interests culled from the real property in question shall accrue to the lender. The proceeds are used to offset any outstanding obligation of the borrower and save the property from being foreclosed.

Each state implements its own foreclosure procedure. This is another thing you need to know because what may be applied to one state can vary in another. But across all states, foreclosure procedures take time and may, in fact, impact on the emotional and physical well-being of the homeowner.

The steps leading to a foreclosure are:

Notice of Default

The lender will send a reminder on the borrowers default payments. This is already a sign that the property is on the verge of being repossessed unless action is taken.

Notice of Acceleration

This is required by many states. If you live in one that implements it, you still have a chance to save your property from being repossessed. The lender simply gives you an ultimatum on how you can satisfy your obligation and avoid foreclosure.

Notice of Sale

When you, as the borrower, fail to meet an agreement with the lender, this notice is sent to you by the borrower. You can either file for bankruptcy or make further negotiations with the lender for a foreclosure in deed in lieu method.

Public Auction

Even when a foreclosed property makes it to this stage, you are not yet free from the obligation. If the proceeds of sale is less than the amount that you owe, the lender will still send you a notice.

From the time a notice of default is given to the conduct of a public auction, you still stand a chance to save your property and your credit score from being marred by a foreclosure proceeding. Take this opportunity and get into serious negotiations with your lender to come up with a win-win solution for both parties. is the leading provider to onlineforeclosure listings.

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