subject: All About Foreclosure Process [print this page] Foreclosures have been in news for quite a while. A number of people may or have lost their homes due to foreclosure, the figures reveal that one of the eight people are in or near to lose their homes in California. If your are new to this term then basically a foreclosure refers to a legal proceeding by which a borrower's rights to a mortgaged or credited property may be extinguished if the borrower fails to fulfill the commitments settled to in the loan contract. It is also possible that the lender may then declare the entire balance unpaid and owing and may wish to satisfy it by foreclosing. Foreclosure is generally by a court-decreed sale of the property or the belongings to the highest bidder, who is often the lender.
People usually take debts by mortgaging their different valuables such as house, cars etc. However not all people are capable to pay off their debts on time. This can lead the lender to start the foreclosure process. Heres how the Foreclosure Process California goes:
There are three basic elements in a real estate transaction and those are: the borrower which is also known as a trustor; the other is the lender or the bank which is the beneficiary; the third one is a neutral party termed as the trustee.
During the course of repayments whenever the borrower or the trustor fails to repay 3 payments, then the lender or the beneficiary has the right to start the process of foreclosure which is also called a trustees sale as it is initiated by the 3rd party or the trustee. The Foreclosure Process California starts by notifying the borrower through a letter that the trustee is being contacted and that they are failed to repay. The letter is termed as the Notice of Default.
There is a period of three months for the borrower to repay the amount after the filing of the Notice of Default letter. The trustor has to come up with some source of repayment either by bringing up a loan current or by trying to get a loan modification. After three months of time period if no action is performed by the trustor then a date is likely to be set for the Trustee sale. The date is usually after twenty days of the end of Notice of Default time period. Before the sale date there will be three public notifications of the same in a local paper. A same notice regarding the sale is also posted on the property.
The sale of the property is carried out outside the courthouse. People who are interested can bid however the bidder who bids the highest amount wins and is required to pay either in cash or by check. In case when there are no successful bids, the property is then owned by the beneficiary. The property that belongs to the lender or the bank is then also called REO or Bank Owned Property.
The trustor can stop the trustees sale if he successfully brings up the current debt and the other fees before five days of the auction. Credit scores can be greatly affected if a foreclosure has been the final result to the mortgage.
