What is Foreclosure?

Foreclosure is a legal process that a lender initiates to secure title to a property that was used as collateral for the mortgage loan that is in default. A foreclosure terminates all the homeowner’s rights covered by the mortgage, and makes the lender the owner of the property. When the homeowner fails to make payments on the mortgage by the specified time, the lender files suit. A lender may send a Notice of Delinquency, which is a notice to a borrower that he/she is delinquent in payments. If the money that is owed plus legal fees for preparing papers for the default is not paid within a certain time, foreclosure proceedings may begin.

The lender may also file a "Lis Pendes", which is a formal notice starting the process. If this is filed, the homeowner has to appear in court to answer the allegations. The homeowner can ask for an extension. If it is not granted, the last phase of the foreclosure process begins, which is known as the "Auction" phase. The foreclosing trustee prepares and records the notice of foreclosure. The notice details the legal description of the property and states the date, time and place of the pending trustee sale.

A foreclosure is completed when the lender obtains the title to the property, the Sheriff or Trustee's deed is recorded and status code 46 is reported to the Single Family Default Monitoring System. The entire foreclosure process usually takes about 180 days from the first missed payment to completion. The entire process can seem overwhelming, and using the help of a Certified Distressed Property Expert© can make it easier. Let our experts assist you in this course of action.

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