With all of the so called loan modification programs, why are there still record foreclosures . People are losing jobs left and right, and if you have one emergency, guess what you can’t make your mortgage payment.
When you start missing your payments, the lender can foreclose on you. In a foreclosure, the lender takes back your home and then sells it to try to get back the loan amount. Your home gets taken and the lender frequently loses money. It is a negative experience for everyone.
The foreclosure process can be begun after you have missed a single payment but this is rare. Generally, there needs to be three payments missed before it is started. Foreclosures can be done either through judicial sale or through power of sale.
In the case of a judicial sale, the court has to oversee the process. With a power of sale, the mortgage holder can handle the sale alone. Judicial sales are possible in all states while only 29 states have power of sale as an option. If you are in one of those 29 states, this will normally be mentioned in your loan agreement. There will be a clause saying that this is the method that will be used should foreclosure become necessary. All involved parties will be notified that the process is being started beforehand.
When the home is sold for less than a amount of the loan, a deficiency judgment can be made which requires you to make up for the loss. This amount can be the different between the loan amount and the sale price. Or, it can be the difference between the loan and the fair value price.
Unfortunately once you are more than three months behind with your mortgage it can be hard to avoid foreclosures. It can be embarrassing, but it is best to be upfront about the situation right from the start and try to find a way to work things out. You may find your lender is willing to work with you so that you can get caught up on your payments.
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