When Can a Bank Foreclose?

Video Transcript

"Let's talk about foreclosure, when can a bank foreclose on a home? There are two types of states in this country. There's a mortgage state and a deed of trust state. Tennessee happens to be a deed of trust state, that is a stronger state in terms of the banks ability to foreclose than a mortgage state. There's a difference in the time lag between the time you default and the time that the bank can legally foreclose. So what's the safe thing to do? The safe thing to do is do not get 30 days past due because it doesn't matter whether you're in a deed of trust state or a mortgage state, once you're 30 days past due, the bank can foreclose. Do they always do that? No not necessarily, they may, they may not, depends on the situation and what the bank feels is in it's best interest. Sometimes the banks don't want to foreclose because the house has gone down in value and it'll cost them money to take and foreclose. There's a new move afoot led by president Obama's plan to help people avoid foreclosure to negotiate with the banks, to help things out. That's not an altogether bad thing because there's a lot of good people out there that got loans, they didn't understand exactly what was going on, the banks made choices that they're sorry they made and so rather than point a finger, the best thing to do is figure out what's the best thing for the bank, what's the best thing for you as an individual and see what you can work out. So there's a great thing to be said for doing your due diligence number one, taking stock of your situation and then contacting your lender and finding out what they're willing to do. I do not recommend you do this without proper legal counsel. They will have their way with you. A loss mitigation department of Wells Fargo and Sun Trust is they're not people that you want to trifle with or just go in and have cute conversations because they're not on your side, they're on their side."