Phoenix Urban Living News. Real Estate In Phoenix Arizona

Steps To Take To Avoid Foreclosure.

Despite monthly reminders that the mortgage is in arrears, it is surprising how many homeowners are caught off guard when they find out they are headed towards foreclosure. They put off the inevitable, or they spend time attempting to get the funds to pay. Being aware of the usual timeline may help you to avoid this horror.

The first step on this slippery slope is when the borrower misses the first monthly mortgage payment. The bank will normally send out a delinquent notice. In many cases, the borrower can get the payment made, albeit a little late. If there is some question about whether he can pay it quickly, he should contact one of the bank’s credit counselors.

If the homeowner misses another payment, the bank will usually make direct contact. After all, they do not know if the borrower is sick or even dead and cannot respond to the notices. The homeowner should not avoid this phone call. Your lender wants to try to make an arrangement.

Once the third non payment happens, the loan is considered in default. The lender will send out a certified notice advising the borrower of this fact. This letter is known as a Demand Letter or a Letter to Accelerate and failure to answer it will result in the process of foreclosure to begin.

This is typically the point when most homeowners have given up, but the lender is still willing to try to come to an agreement.

The fourth missed month will force the bank to nullify any conditions offered in the letter to accelerate and at this point they have given up on the loan. Lawyers are needed to draw up the official paperwork, and the cost of the lawyers will be tacked onto the borrower’s bills. The house will be placed for official sale.

The official date of the property foreclosure is this sale date. This date must be posted in a local newspaper, and notified to the homeowner. The homeowner may still reclaim his home, but at a very expensive level.

You may have noticed one common element in each of these steps. That until the very last instant, there is the time and the possibility to negotiate a solution with your bank. To avoid the final steps, the borrower should stay in touch with his bank to find any avenue to retain his home.