Understanding The Foreclosure Process
A foreclosure occurs when a property owner cannot make principal and/or interest payments on his/her loan, typically leading to the property being seized and sold.
Stages of Foreclosure
The foreclosure process is not very difficult to understand. There are several stages during which a homeowner has an opportunity to bring the loan current or seek alternative options and avoid foreclosure.
- After about three to six months of missed payments, the lender orders a trustee to record a Notice of Default (NOD). At the County Recorder’s Office. This puts the borrower on notice that he or she is facing foreclosure and starts a reinstatement period that typically runs until five days before the home is auctioned off.
- If the default isn’t corrected (the loan must be brought current) within three months, a foreclosure sale date is established. The homeowner will receive a Notice of Sale, and this notice will also be posted on the property. In addition, the Notice of Sale is recorded at the County Recorder’s Office in the county where the property is located. Finally, this Notice of Sale is also published in newspapers local to the county in question over a three-week period.
- The foreclosure Trustee Sale typically occurs on the steps of the county courthouse in which the property is located. The time and location of this sale are designated in the Notice of Sale. At the Trustee Sale, the property is auctioned in public to the highest bidder, who must pay the high bid price in cash, typically with a deposit up front and the remainder within 24 hours. The winner of the auction will then receive the trustee’s deed to the property.
Bear in mind that these time frames for the stages of the foreclosures process are general. During this recession and struggling real estate market we have seen much more varied time frames. But like we have mentioned before, it is important to understand the process and to take the appropriate steps in order to avoid foreclosure. See our other blogs on Short Sales and Pre-foreclosures or contact us for more information on what your options are.
Calabasas and Westside real estate and homes for sale