What is the foreclosure process and how much time does it take?

by oliver on September 30, 2010

Question:

What is the foreclosure process and how much time does it take?

I live in CA. And what about the short sale process, like how long does it take?

Answer:

A legal foreclosure process begins when the borrower receives a Notice of Default informing him that he is behind his mortgage payments and his property is soon to foreclose if the payments are not made current. After the borrower receives the notice, he is given 90 days to make his mortgage current. The borrower can work out an agreement with his lender in order to avoid the foreclosure from taking action.

There are several options that the borrower can consider such as refinancing, forebearance, home affordable modification, short sale and bankruptcy filing. With regards to short sale, the lender agrees to sell the property at a price near or equal to its fair market value. After the property is sold and the payment from the short sale is collected, the borrower will be relieved of all financial obligations pertaining to mortgage.

If no agreement was made though, a notice of sale will be issued, which contains the schedule of the sale of the property thru auction. This is usually given 21 days before the actual sale date. During the auction, the person who gives the highest bid will be able to get the right of ownership over the property. The new owner can then file for an eviction process so that the previous owner, if he is still staying in the house, is ordered to move out.

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