What Is the Foreclosure Process?
Foreclosure is the process of a bank or lender taking back into possession a property that they secured a mortgage against, using the home as collateral. Consider working out a mitigation plan to prevent foreclosure with help from a mortgage specialist in this free video on foreclosure.
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Hi, my name is Stetson Lowe and in this clip we're going to be talking about the foreclosure process and what is it. Foreclosure is the process of the bank or a lender taking back possession of a property that they secured a mortgage against and lent the borrower money on to purchase the property, and their collateral was the home, itself. So if a borrower stops making payments in the deed of trust or mortgage, the lender or bank has certain rights to take that property back upon default. And, each state varies a little bit on how the process works, but the overall process is much the same. Typically, once a borrower has gone ninety days late on a mortgage payment, they will file what's called a notice of default with the county, and begin the foreclosure process. There's a period of procurement where the borrower has the right to bring the mortgage current, and catch up all his payments, or work out a suitable work-out plan with the lender, I guess. A mitigation plan on how the lender can keep that borrower in the home. If, during that time, the borrower does not work with the bank or has no way of bringing the mortgage current, then the lender will then schedule an auction date at which point the home will go up for auction on the county courthouse steps, and it will be sold to the highest bidder. The trustee for the bank will usually always show up to the auction and make sure that if the bidding is not going high enough to cover their mortgage or to get an acceptable point of loss for the lender, their trustee will submit bids until they hit that point, and they'll actually purchase the home back at auction, and take control of it and then fix it up, and put it back on the market and try to sell it to get more money back so they don't lose so much in the foreclosure process. So, that's foreclosure in a nutshell.