What Happens After a Foreclosure Notice?

Foreclosure auctions come after foreclosure notices.

When mortgage payments are defaulted, the lender may initiate the foreclosure process and issue a foreclosure notice with information on the scheduled public auction of the property. The proceedings after the notice publication vary from state to state.

Reinstatement

According to Lloyd Segal, author of "Stop Foreclosure Now", the time between the foreclosure notice and sale is called reinstatement period. During this period, the borrower may save the property from foreclosure by bringing her loan current.

Foreclosure sale

At the scheduled sale, interested buyers may gather and bid for the auctioned foreclosure property. The property goes to the highest bidder who can offer a satisfactory price and full payment.

Types

There are two types of foreclosure sales, judicial and nonjudicial. A judicial auction is overseen by a sheriff or trustee of the county to which the property belongs. A nonjudicial sale is administered by a representative of the lender.

Redemption rights

According to "Foreclosure Self-Defense for Dummies", some states allow the borrower to redeem the property after the sale. Redemption periods can be as long as 12 months. The borrower must be able to pay a required amount within the redemption period in order to reclaim.

Move out

In most cases, the borrower does not have to move out of the property immediately after a foreclosure notice is issued. The lender or the new owner may obtain an eviction order.

References

• "Stop Foreclosure Now: The Complete Guide to Saving Your Home and Your Credit "; Lloyd Segal; 2008
• "Foreclosure Self-Defense For Dummies"; Ralph R. Roberts, Lois Maljak, Paul Doroh, Joe Kraynak; 2008
• MSN: When Foreclosure Doesn't Mean Eviction