Foreclosure Overview

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What Is Foreclosure?

Foreclosure occurs when a lender takes possession of a home because the homeowner defaults on their mortgage payments. To take possession of the home, the loan or mortgage must be secured by the home. Once foreclosure is complete, the home becomes the property of the lender.

What Steps Are Taken In a Foreclosure?

Generally, before initiating foreclosure proceedings, a lender must send the homeowner a notice of default. This is usually done after 3 months of non-payment. The notice usually states that the homeowner has been delinquent in his or her payments, and states that the lender has the ability to repossess the home. The lender may also place a foreclosure lien on the home.

If the homeowner continues to not make payments, or establish a new agreement with the lender, the lender will initiate a foreclosure proceeding. In these proceedings, all the lender has to prove is the existence of a mortgage, and that the homeowner is delinquent in payments.

Once the house is foreclosed, the lender will usually sell it at auction to try to recoup their losses. If the house fetches less than the lender is owed, the homeowner may have to pay the difference, called a deficiency judgment.

What Protections Does the Homeowner Have During Foreclosure?

While the lender has a legal right to seek repayment of a loan, the homeowner still has some protections.  These protections include:

Do I Need an Attorney for a Foreclosure Proceeding?

Foreclosure can be a daunting and emotional process for many people. If you are facing foreclosure, an attorney can help you evaluate your options and ensure that your rights are enforced throughout the process.

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Last Modified: 01-13-2014 10:52 AM PST

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