What Happens in a Foreclosure?

Foreclosure is not a pleasant experience for anyone involved in the process.

A homeowner unable to pay their mortgage may experience foreclosure of their property. Foreclosure indicates the owner's rights to the property are ended because of the mortgage debt. The lender retains the property rights after foreclosure.

Notification

Lenders notify property owners of the impending foreclosure if mortgage payments are not received on time. Failure of payment can be due to financial difficulties or financial emergencies. Property owners must be in contact with the lenders during this time.

Notice of Sale

The property owner will receive a Notice of Sale, which states the foreclosure of the home. The Notice of Sale is also printed in local newspapers to let the public know about the pending sale of the property.

Auction

During the auction, the amount for the first bid of the property is typically equal to the outstanding costs left by the previous property owner to the house. The property is considered by the lender as real estate owned (REO) when nobody bids on the first bid.

References

• The Foreclosure Process: Understanding How Foreclosures Work
• What Is Foreclosure?
• Foreclosure Questions: What Happens During a Foreclosure?