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How Does Foreclosure Work ?
Today, many people in America are at the brink of foreclosure. If you feel threatened, then you may want to know how a foreclosure works. Foreclosure is a process where the lender claims the property because of non payment of the loan amount. |
However, given the current market scenario, even lenders do not want to foreclose properties because they literally have no use for them. There are absolutely no buyers in the market. Also, foreclosing and then selling the property again only proves to be additional expenditure for the lenders.
If the lender does decide to foreclose the property, they will first need to approach the court and process the loan papers for the court to review. The court will send a notice to you. You will receive the notice only if you have not paid any amount towards your mortgage for 60 days. However, before that the lender will try to contact you several times. This would be the right time to work out a solution with your lender if possible. If you do not respond to the lender, then the delinquency is reported to the credit agencies.
After 60 days, the lender sends a notice through the court and the court would have also set a date for hearing by then. If you do not show up for the hearing, then the auction will be held directly. If you show up for the hearing, you still have a chance to work out a solution for repaying the loan. Otherwise, the foreclosure is made public and the rest of the procedure is carried out.
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