The Mortgage Foreclosure Process

There is no time to hesitate when the mortgage foreclosure process begins.

Time is absolutely of the essence when a forclosure notice is filed against you. Typically a mortgage company will file a lis pendens lawsuit against you after you are delinquent on your mortgage for 3-6 months.

I have seen the bank wait as long as a year or more before filing on a homeowner! That particular person just fell through the cracks of the processing nightmare.

Typically banks do not want to foreclose on a house and they will do anything to avoid it. A short sale is a great way for the homeowner and bank to both win.

Once an attorney hired by the bank files the formal paperwork at the county courthouse the clock has begun ticking. You must act fast if your goal is to avoid foreclosure.

Step 1 - Explore your options. Can you refinance? Do you have a way to settle up the back payments owed? Can you sell your house fast? Can you restructure your loan?

Step 2 - Contact the bank. If you have no way to settle up with the bank, call and ask what you can do. As I mentioned, they don’t want to foreclose and they will try and help you work it out.

Step 3 – Contact a home buyer. You will start to receive many letters in the mail from real estate investors and realtors. Start calling them and see what they have to say. I myself have helped many people avoid the mortgage foreclosure process and I enjoy it. Screen them and go with someone you can trust and who you feel the most comfortable with.

Step 4 – Attempt to sell your home. If none of the previous steps have worked, put your house on the market. If you can locate a trustworthy Agent to sell your house and if you have enough equity do it. If not, try to negotiate a short sale with the bank and sell it yourself.

Step 5 – Offer the bank a deed in lieu of foreclosure. If nothing else works, offer to give the bank your house. They will sometimes accept a deed in lieu of foreclosing on a house if it makes sense for them.

Step 6 – Declare bankruptcy or let them take the house. This is an absolute last resort. Do not do this until you have tried everything else.

After the bank files the notice with your county, there is some time before the sheriff sale or judgment sale. It could be as much as 1-3 months or even up to 6 depending on how aggressive the mortgage company is and your local laws.

If you house goes to the auction, chances are the bank’s representative will buy the property back and it will become bank owned property. Many auctions contain properties that have little to no equity, making it harder to find a good deal at an auction.

The mortgage foreclosure process can be avoided if quick and decisive action is taken, so don’t hesitate.

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