Types & Stages of Foreclosures

By Beatrice Jordan

Foreclosure is the process by which your lender can legally take ownership
of your home from you, if you should happen to fail to hold up your end of
the bargain detailed in your mortgage or deed of trust agreement. Once
the lender forecloses upon your home, you have to move out otherwise
you will be forcefully evicted.

In addition to losing ownership of your home, you can also lose a lot
more. For example, you may still end up owing the lender more money,
depending on the value of your home at the time of foreclosure. You will
more than likely also destroy your credit rating in the process, which will
make it much more difficult to buy a new home in the future.

There are two different types of foreclosure that you can find yourself
facing: Judicial foreclosures, and non-judicial foreclosures. In either case,
your property will more than likely be seized by the lender and put up for
auction, and the highest bidder will become the new owner. In some cases
the lender bids on the house during the auction, at whatever price the
debt is owed at. If no other buyer bids higher than the lender, the lender
wins the property and is able to turn a profit on your home and to get
back all of the money that they lost in the transaction.

Pre foreclosure is the time period that exists between the day that the
lender notifies you that a foreclosure lawsuit has been filed or the day that
a Notice of Default has been filed, and the actual date that the property is
slated to be sold at a public auction or in a trustee's sale. Just because
you receive a notice like this, it simply does not mean that you have lost
the fight.

You still have the possibility of preventing a foreclosure from occurring.
For example, if you want to you can sell the property, or you may
consider filing for bankruptcy. You may also consider refinancing, or
devising a workout plan with your lender. The most important thing to
understand is that all is not lost, and that you still can save your house.
The foreclosure rates are growing rapidly, and the number of homes being
foreclosed upon in recent years has shot up significantly from the
numbers a decade or two ago. You are not alone in this, and there are
hundreds of thousands of other people all over the country who are
fighting this same process at the exact same time.