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In the past, the law gave automatic ownership of the property to the lender. Luckily, today, the numerous state laws and regulations develop over the year. Home borrowers are given time to pay off mortgages before their properties are taken away. Although every state may have their own variations, the basic principle of foreclosure law remains the same.
Foreclosure Process:
In the United States, the procedure of foreclosure may vary from state to state, but there are several stages which the homeowners has a chance to pay back the loan to avoid foreclosure.
After the loan payment is missing for approximately six months, the lender may order a trustee to record a Notice of Default (NOD). The home borrower will be notified of foreclosure. This begins a reinstatement period.
If the loan is still in default within 3 months, a foreclosure sale date is set. “Notice of Sale” will be posted on the property and is recorded at local County Recorder’s Office. The Notice of Sale will then be published in local newspaper for at least 3 weeks.
Finally, the property will be auctioned to the public for the highest bidder. The highest bidder must pay the high bid price in cash. Generally, he/she must deposit up front cash and pay the rest within twenty four hours. After the payment is made in full, the auction winner will get the trustee’s deed to the property.
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