Foreclosure Overview
What is the process and how does it affect your options?
It all depends on what stage of foreclosure you may be facing. Although the process is not well known to the average person, it is quite systematic. As each stage of the foreclosure proceeding passes, the options available become more limited. Those that act early are most often able to get the process discontinued and keep their credit in good standing. In many cases this does not even require the owners to move from their present home. So lets talk a little about the process of a bank foreclosing on your mortgage. The stages of foreclosure are:
- Stage 1: The bank issues a statement of claim. This is after you have missed at least three payments on your mortgage and it is questionable as to your ability to service the financing of your home.
- Stage 2: This statement of Claim must be served to the owner of the home.
- Stage 3: The bank will request in this Statement of Claim that the Court order the home to be sold. The range of time granted by the court is dependent on the equity in the home and can vary from one day to one year. The most common redemption period is 6 months or less.
- Stage 4: Next, the bank must file an Order for Sale of the property. This must be accompanied with a property evaluation from an appraisal company. In addition, this step will outline more specifically the dates of the redemption period and how the property is to be sold either by the Court Tender Process or via the MLS at the appraised value.
- Stage 5: The Order for Sale must be served to the owner of the home.
- Stage 6: If the redemption period passes without the owners having the financial capacity to pay the arrears, then the home will be sold.
