Homeownership has long been accepted as a core component of the American dream. Despite a majority of Americans aspiring for homeownership, they face several common hurdles, one being able to really afford the home. When you are unable to make your mortgage payments, foreclosure can happen. Understanding foreclosure processes may keep you in place and save your dream home in Cleveland!
Understanding the Foreclosure Process
Foreclosure is the process in which a lender (usually a bank or mortgage company) attempts to repossess your house due to nonpayment. A distressed house is a property that is going through the foreclosure process. A real estate-owned property (REO) is a property that the lender has already repossessed. How does the foreclosure process work? There are essentially five stages of foreclosure.
Stage 1: Missed Payments
Once you miss one or more mortgage payments, it is difficult to catch up. If you lost your job or are going through a financial crisis, it can seem almost impossible. The lender may be willing to work with you through options such as forbearance, refinancing, or loan modification. However, if the payments stop coming, the bank will have no choice but to repossess the house. Keep in mind that the bank wants to avoid foreclosure as much as you do. Foreclosures are expensive and look bad in bank records. Plus, the bank does want the responsibility of reselling your house.
Stage 2: Public Notice
Once you miss three to six months of mortgage payments, the lender either submits a public notice to the County Recorder’s Office and files a lawsuit against you. It is known as a Notice of Default (NOD). The bank must inform you that they are taking legal action against you if you do not bring your payments current.
Stage 3: Pre-Foreclosure
Once the lender records the public notice and informs you of their intent to take legal action, they have 90 days to repossess the house. During the 90 days, the lender may present multiple options for you to either pay off the loan or catch up with your payment. One option may be to enter into a short sale with a potential buyer.
Stage 4: Auction
At the end of the 90 days, it becomes clear that you either cannot or do not want to make further mortgage payments. At this point, the lender or an appointed trustee will put the home up for auction. The auction is open to the public and usually occurs at the steps of the county courthouse. Interesting note: The State of Kansas law does impose a Right of Redemption, which allows you to reclaim the property 30 days after the auction.
Stage 5: Post-Foreclosure
If a buyer purchases the home at auction, you will be evicted from the home immediately. If the lender does not sell the home at auction, they will attempt to sell the home to recoup the loan balance. They may sell the house directly from their website or hire a realtor or broker to sell the house on their behalf.
Sell Your House Fast to Avoid Foreclosure!
Understanding foreclosure processes is extremely helpful. And legally, you can sell your house during foreclosure as long as you sell it before it goes to auction or during the Right of the Redemption period (if this applies in your state). This smart option is to sell your house ‘as-is’ for cash to a local home buyer in Cleveland, Ohio. And if you are in this situation right now, talk to us – CPD Homes, LLC! We are buying houses in Cleveland, and have been helping families and homeowners since 2012. We’ve been working with home sellers dealing with – inherited properties, divorce, behind on the mortgage, major repairs needed, sudden move, or for whatever reasons why homeowners sell their homes, CPD Homes is here to help. We buy houses in any condition and in all price ranges! So call us today to discuss your property at (216) 619-4387
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