In 2020, the United States had approximately 1 foreclosure for every 12,000 properties. As COVID restrictions lift, experts predict that foreclosure will greatly increase . While it’s impossible to see into the future, you can arm yourself with information. Here are four foreclosure facts about that you should know!
1. What Exactly is Foreclosure?
Foreclosure occurs when homeowners fall behind on a debt secured with their property. A secured debt is a mortgage but it can also be a tax, mechanic, or HOA lien. These are the six stages of foreclosure:
- Payment Default: After 60 days, or two missed debt payments, the bank classifies the debt as being in default.
- Notice of Default: After 90 days, the bank or lender issues a notice, and 90 more days are given to settle the account.
- Notice of Sale: After another 90 days, the County sets an auction date and location.
- Trustee or Sheriff Sale: After the notice, the home is publicly made available for sale to the highest bidder at auction.
- REO: If the home doesn’t sell at auction, the bank or lender takes ownership and tries to sell it.
- Eviction: 90 days after the sale, a local sheriff evicts tenants from the premises.
2. PreForeclosure vs Foreclosure: What’s the Difference?
In real estate, a common question asked is the difference between preforeclosure and foreclosure. While Preforeclosure accounts for the first three stages of the entire process, “a foreclosure” refers to the property after repossession. During preforeclosure, homeowners have the most options.
Once a property has been repossessed, it’s there are many barriers to getting it back. In this series, the term foreclosure will describe the process of losing property as a whole.
3. You May Still Have A Debt to Pay!
This foreclosure fact can really catch unsuspecting homeowners off-guard! If the proceeds of a sheriff sale or auction don’t satisfy a debt, a deficiency balance may remain. If a mortgage balance is $100k and the property sells for $80k, a $20k deficiency balance exists.
The liens and debts associated with a home might not be paid-in-full when a foreclosure concludes. When a deficiency balance exists, a court may force the original homeowners to pay through a judgment.
4. You ALWAYS Have Options!
The most important fact about foreclosure is that regardless of the cause, you have options! Going through foreclosure is tough, but pushing past the emotional shock leads to quicker resolution. The stress of losing a home often prevents people from taking action, which makes a bad situation worse.
In this series, we’ll provide a number of solutions including loan modification, refinancing, relief programs, creative financing, and how to turn your situation into cash. Stay tuned for little-known foreclosure secrets like the three most powerful tools that you can use to fight foreclosure.
For more useful foreclosure facts and information on how you can save your home from foreclosure, head to www.bluetowersfg.com or email us at info@bluetowersfg.com!
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