Foreclosure is a legal procedure in which property securing a defaulted loan is sold by the bank. This is done to repay a borrower's loan. The amount paid by a buyer at the foreclosure may not cover the full outstanding loan amount, which means the borrower may continue to owe the lender the difference. Pre-foreclosure is the foreclosures proceedings the bank does between the steps the bank notifies the borrower of default and the day the banks loan is satisfied.
When it comes to foreclosures, there are primarily two types: judicial and non-judicial. The difference is that the judicial foreclosure requires a lawsuit to be filed in court. A Non-judicial bypasses the process of court.
Most states allow both procedures.
The Basic Outline for Non-Judicial Government Foreclosure
Initial Steps:
A. The note, deed of trust and information on the default are forwarded to the trustee.
B. The notice of default and other necessary documents are prepared.
C. The notice of default is then recorded and the foreclosure time line begins.
Default Period
A. A trustee sale guaranty (TSG) is ordered from a title company.
B. The required legal mailings are sent to the borrower and the junior lien holders.
C. If the loan has not been reinstated or paid off within the default period, the lender then authorizes the next step in the foreclosure proceedings.
Publication Period and Trustee's Sale
A. The trustee will prepare, record and arrange to post the notice of trustee's sale.
B. The notice of trustee's sale must be published once a week for three consecutive weeks in a newspaper of
general circulation near the property location.
C. The borrower or junior lien holder may reinstate the loan at any time up to five business days before the sale date.
D. If the loan has not been reinstated, prior to five business days before the sale, the beneficiary may demand that the entire unpaid obligation be paid in full during that five-day period.
Looking to purchase a Foreclosure?
Did you know that you can get a better deal on a pre-foreclosure? Why, you ask?
A pre-foreclosure is a home that is in default but the loan has not been put up for sale yet. By the time a home gets foreclosed on, there could be 18 months of no payments, maintenance fees, attorney fees and title company fees added on. By finding a pre-foreclosure, the bank is more willing to sell at a discounted price (commonly known as a short sale) and save you the buyer money. Be patient in this process, banks will not negotiate until they have an offer and they may take 10-90 days to negotiate. It is not uncommon for the bank to offer a substantial discount with a good approved buyer. Banks do not like contingencies, so it is best to remove them as soon as possible.
To get a list of pre-foreclsoures, give us a call today! (913) 980-5809 or (913) 568-3219. |