The foreclosure process is the legal process by which a lender or creditor can seize and sell a borrower’s property in order to repay the outstanding mortgage debt. The process typically begins when a borrower fails to make mortgage payments as agreed upon in the loan contract. The specific steps of the foreclosure process can vary depending on the laws of the state where the property is located. However, in general, the process typically follows these steps:
- Default: The borrower defaults on their mortgage by failing to make payments as agreed upon in the loan contract.
- Notice of Default: The lender sends the borrower a notice of default, which informs the borrower that they are in default and that the foreclosure process has begun.
- Right to Cure: Depending on the state, the borrower may have a certain amount of time to “cure” the default by catching up on missed payments.
- Notice of Sale: If the borrower is unable to cure the default, the lender will then file a notice of sale with the county. This notice is typically published in a local newspaper and the notice will state the date, time, and location of the foreclosure sale.
- Foreclosure Sale: The property is then sold at a public auction to the highest bidder. The proceeds from the sale will be used to pay off the outstanding mortgage debt.
- Eviction: If the borrower is still living in the property, they will typically be evicted by the new owner once the sale is final.
It’s worth noting that Foreclosure can also be done through a non-judicial process, which is faster and doesn’t require a court order.
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