Foreclosures Phases

Posted on February 4th, 2009 by Samanta Parks

Recently, many homeowners have trouble with mortgage companies, as they are not able to pay their debts on time. The truth is that the value of the loans is very high, but they have known it before, so they should have approached their situation from another perspective since the beginning.

The consequence of their lack of deep thinking is foreclosure. Unfortunately, when from the legal point of view loan companies cannot find better solutions, you will have your property sold. Many homeowners almost had heart attacks when a lawyer looked for them willing to give them details about the foreclosures phases.

Firstly, you will receive a decisive notice when you hopelessly face the foreclosure for sale situation. The first reaction is not to reply to it, but it is no use to do that because after 15 days you will find it again. Of course, you can talk and it is a good thing to do it as soon as possible. If you are silent, the lawyer talks to a judge who contacts a notary for the sale of your property.

Prices will be shared by different creditors. Actually, before calling a notary, the judge can try conciliation, but it may fail. Furthermore, the notary becomes the most important player in this game. His or her mission is to record specifications. They are for example papers containing the conditions under which the public sale is performed.

The notary records the sale place and the sale date, as well as the sum of money, which the buyer wants to offer. Then, the sale will take place in 6 months since the notary’s appointment.

Now imagine that the foreclosure notice has come again. If nobody says anything, the sale of the property is announced by the notary on a specific day. Besides, it is announced through posters and newspapers, and this is a terribly unpleasant thing for the homeowners.

Before this moment, though, they may stop the procedure and the sale can take place under a lower price than the debts, under the agreement of the creditors. When the property is sold, foreclosure can hardly be avoided.

If nobody bids, the property will be sold in 15 days. The new homeowner will offer the money to the notary together with the foreclosure costs. The price will be shared then to different creditors. There is a risk though. The property price may not be sufficient; therefore, part of the creditors may receive no money.

Even if you have sold the property, the buyer will not pay the rest of your debts. Whether the debt is lower than the price, the balance can be recovered. If there is a borrower who cannot pay the debts for a mortgage, the same procedure will be followed. The difference is this time that the procedure can begin with a trial, forcing the debtor to pay some money to his or her creditor. There are cases when, under special conditions, private sale of the property can be asked.

This procedure takes time and it is very expensive. Sometimes creditors hesitate before initiating it because they do not even know if they can recover something. The debtor will suffer the most because he is the bearer of any cost. At the beginning of this ordeal he must think of the future scenario. Unfortunately it is difficult to think clear in the case of a foreclosure!