When a person is facing foreclosure of their home, it can be a very difficult situation. There is information about the foreclosure process that is helpful to understand.
Foreclosure is a legal process in which a lender takes possession of property after a borrower has failed to keep up with their mortgage payments. The lender must send the borrower a written notice of default, which states that the lender intends to begin the foreclosure process due to nonpayment.
The borrower may want to contact the lender to discuss their options, including a loan modification, forbearance or repayment plan so they can catch up on payments to avoid foreclosure.
If the lender decides to proceed with the foreclosure, it will file documents with the court outlining the details of the default and ask the court to allow the foreclosure to go forward. The borrower will receive a copy of the documents and is given an opportunity to respond with any defenses or challenges they have to the foreclosure. It’s important for the borrower to respond, otherwise, they could face a default judgment in favor of the lender.
If the court allows the foreclosure to go forward, the property will be scheduled for sale, usually at a public auction. If the borrower wants to keep the property, he or she may be able to do so by paying the outstanding balance prior to the sale. Once the property is sold at auction, the new owner can formally evict the borrower and take possession of the property.
Foreclosure’s effect on the borrower
In addition to the emotional toll of losing a home, foreclosure can also damage the borrower’s credit score and leave them responsible for any money still owed after the home is sold.
There are resources available to borrowers to navigate the foreclosure process.