You are possibly confused, worried, and mad if you are a homeowner facing foreclosure. For several months, you have probably been dealing with financial difficulty and might be feeling like you have reached the end of the line.
Real estate foreclosure isn’t a thing people decide to go through. Sometimes, it is hard to understand what to expect during this nerve-racking event.
How Does It Happen?
The process starts whenever a homeowner is not able to pay their mortgage. That would force the lender to start the foreclosure procedure. The lender is usually a bank. Typically, a lender will start the foreclosure process around 3 up to 6 months after the homeowner fails to pay the mortgage.
It is crucial to keep in mind that foreclosure is the last resort for a lender. Typically, they would work with the homeowner to look for an answer that benefits both the lender and the homeowner.
Working with the Lender
Homeowners are urged to call their lender as soon as possible when they get a notice of foreclosure. As we’ve mentioned, they’ve got to work together. If they do this, they can help each other out to look for an ideal solution. The process can be somehow stressful and time-consuming. However, to help it go as smooth as possible, there are several things a homeowner can do.
Gather Financial Statements
A homeowner will have a chance to check their whole financial capabilities if they organize their financial documents together. This is a great method to prepare to intelligently speak with the lender. Here are a few of the suggested documents to prepare.
- Income Statements
This might include monthly, bi-weekly, or weekly pay stubs as well as any other sources of income available to the homeowner. These details are vital in helping a lender identify the financial situation of the homeowner.
- Monthly Bills
Monthly bills would help the lender in identifying the whole financial situation for the homeowner.
- Mortgage Statements
Mortgage statements would show the amount of the mortgage payment per month as well as the remaining balance of the loan.
Initiation of the Foreclosure
The lender will start the foreclosure process if a lender and a homeowner can’t work out an answer. There are 2 main methods of foreclosure. This depends on the state where the house is.
- Non-Judicial Foreclosure
Non-judicial foreclosures don’t need oversight by the court. The lending company supervises the auction in a non-judicial foreclosure. Usually, compared to judicial foreclosures, this type will take less time to resolve.
- Judicial Foreclosure
This method will include formal legal proceedings and is supervised by the court system of the state. Several states require this legal procedure. The court system will supervise the sale at public auction.
Before they initiate foreclosure, the lender will send a notice to the homeowner stating their intent to foreclose. Typically, this is the time for the homeowner to rectify the matter. If you think that you will be getting a foreclosure notice anytime soon, it is best to sell your home to flippers. Typically, they are companies that post “we buy houses”.