Definition
Foreclosure is a complicated process in which a lender seizes real property (land and structure) in an attempt to cure borrower default.
Analysis
A series of legal steps must be taken before a lender may repossess real property used to secure a mortgage loan. If any steps are skipped or improperly completed, the lender may have to restart the foreclosure proceedings. The main steps include:
- Notice of Default
- Notice of Acceleration
- Notice of Sale
- Public Auction
There are many alternatives to foreclosure that a homeowner may have available to them, depending on their situation. These include:
If the homeowner does not wish to keep the property, or believes that they cannot reasonably afford to keep it even with lender concessions, they may have two alternatives to foreclosure:
Certified Housing Counselors are able to help distressed homeowners evaluate their financial situation to determine what options might work best. In most cases, homeowners may avoid foreclosure if they act soon enough!
