Money Mondays: The Foreclosure Process

It is unfortunate that today, many people have come to the point of losing their home due to foreclosure.  There are a lot of factors that created this problem, and there are many homeowners that never imagined being put in this position.  Also, there are many buyers who are looking to get a deal, and see foreclosures as the way to go.  

But what is it?  What are the steps, and what can you do if you are faced with a foreclosure?  For the full article, please refer to Grasping the Foreclosure Process - For Dummies.  For a brief recap, see the steps below.

Ohio is a judicial foreclosure state.  The process can take a very long time, I have heard up to one or two years.  If you believe you might be facing foreclosure, contact a realtor about your options.  Often, a short sale can be arranged, and that is better for your credit.  Generally speaking, a foreclosure will be on your credit report for 10 years.  You cannot apply for a mortgage for three years.  Your credit score takes a big hit.

• Pre-foreclosure - this can happen as early as 10 days after missing a mortgage payment.  You will get a notice in the mail, or possibly a phone call that you are in danger of foreclosure.  If you end up paying that bill, you may be charged a late fee, and your credit might take a ding, but you are not in danger at that point of losing your home.  If you know that you are not going to be able to make your payments, and cannot foresee that changing, this would be a great time to contact your Realtor and see if it might be possible to sell your home with a short sale.    
• Foreclosure Notice - The lender posts an official notice in the paper, sends you a letter, and posts a sign on your residence.  
• Reinstatement Period - There is a period of time after this notice where you may be able to get the process reversed by catching up with your payments.    
• Auction or Sale - If you have not been able to make up your payments, this is the point where you house is sold either to an investor or back to the lender in an auction.  
• Redemption Period - In most jurisdictions, you will have a chance to essentially buy your house back during this time.  The time varies, but the rules do not.  You would need to make the full payment of what you owe, plus any fees you have incurred during the foreclosure process.  
• Eviction - After the redemption period is over, you need to move out.  If you do not do so voluntarily, the lender must go through a legal eviction process.  

I will be publishing more blog posts on this topic, and on short sales over the next couple of months.  Whether you are a homeowner who might be facing foreclosure or a home buyer looking to find a foreclosed property for purchase, contact me.  I can help you, and would be happy to be by your side during this process.  

Have a great week.

Jennifer