If after exploring all other alternatives such as federal assistance programs, loan counseling and/or modifications, or a short sale, you are still faced with foreclosure, you need to be familiar with that process and what it means for you. The procedure varies from state to state, and your first step is to be aware of the regulations regarding your Bradley Beach home.
There are three types of foreclosures used by individual states, judicial, power of sale, and strict foreclosure.
1. Judicial is allowed in all states. After the lender files with the judicial system, you will receive a notice for payment. After 30 days with no response from you, the property is sold at an auction conducted by the court.
2. Power of sale, also known as statutory foreclosure, is allowed in many states if your mortgage contains a “power of sale” clause. In this case, the mortgage company, after sending out the required notices and waiting for an established period of time, carries out the auction of your Bradley Beach home.
3. Strict foreclosure is allowed in some states and provides for the property, again after the required notices and time period, to revert directly to the lender. No auction is involved. Usually this type of foreclosure occurs only when the amount of the debt exceeds the value of the property.
If you cannot meet your mortgage obligations, the lender must notify you in writing as it proceeds with each step of the foreclosure process, designed as follows:
1. Notice to accelerate: Once you are sixty days past due, you will receive a notice to accelerate. The only way to stop the process at this point is to bring current the loan amount past due plus any assessed late fees. You may also be informed that you will be responsible for any attorney fees incurred.
2. The demand letter: If you do not pay the past due amount by the date previously established by the lender, it will hire an attorney to send you a demand letter stating that, without immediate payment, the foreclosure will be sent to the court.
3. Notice of default: Without a payment from you, the lender will file a formal foreclosure notice with the court. You will have 20 to 30 days to respond to this judgment before further steps are taken.
4. The notice of sale: After no response from you in the allotted time period, you will be given a notice of sale which sets the date of the court’s auction or the repossession of your Bradley Beach home by the lender.