How The Home Foreclosure Process Works

If you're facing hard financial times due to a loss of a job or some finance problem, and you have a house, you could be having trouble staying abreast of your payments. You aren't alone. There’s more than 177,000 houses in foreclosure just in the state of Florida at the moment. And that number is down from just two years back.

Naturally, your home may never go as far as going into foreclosure. If you can hang in there and keep up with your payments, you may be able to bypass the foreclosure process altogether.

But if the spectre of foreclosure is bothering you, you may be considering how the foreclosure process works. Here’s a top level view of what might occur. Of course the method is different from state to state, but here's what may occur.

Notice To Accelerate

If you have missed a loan payment or 2 you will receive a letter from your lender reminding you you're behind on your payments. You will continue to receive these letters for 2-3 months.

If you get past 60 days late you may receive a “Notice To Accelerate” letter. They're going to be demanding payment and threatening action in the courts if some part of the loan payment is not made. If you'd like to avoid foreclosure this is the time to retort and contact the lender. You may be able to work something out.

If you fail to respond you could be putting yourself in a bad position. The nicest thing you can do is begin bargaining with the bank.

Demand Letter

If you don't respond by the stated date the lender may send you what is often known as Demand Letter. This is formal notice that if you don't pay they may file foreclosure papers with the court. Your are now formally in the court system.

The bank will sometimes have their own lawyer at that point.

Notice of Default

Now things are getting heavy. The lender’s solicitor will file the foreclosure and you'll get a Notice of Default. This legal document will show the amount that has to be paid. It will give you 20 to 30 days to reply.

Notice of Sale

After the 20 to 30 day period, if you haven't replied, the barrister will file a Notice of Sale. This notice will set an auction date for the property, typically within 30 days of the notice. This notice goes in the local news and your home will legally be put up for sale. The auction customarily occurs in front of the court house. If somebody buys your home, they may sometimes be needed to pay in full within 24 hours. Your house now does not belong to you.

This Is The Process

In a judicial foreclosure state, this is typically what occurs. The method can be stopped at any point before the particular sale date. Once the sale goes thru there is nothing you can do.

Remember the bank does not want to sell your home any more than you do. They often lose money and they do not want to be in the home selling business. Reply quickly and you may have an opportunity to save your house. Reflect upon hiring a foreclosure solicitor who understands foreclosure defense. They will help you get through this process.

Rick Hart is a web business consultant. He provides tools for foreclosure counsels in Tampa that help with loan alterations, short sales and foreclosures.