Explain the foreclosure procedure.

Question

Accepted Answer

Foreclosure is a legal process where a lender takes possession of a property due to borrower default on mortgage payments.

1. Default: The process begins when a borrower fails to make mortgage payments, typically after 3-6 months of missed payments.
2. Notice of Default: The lender files a Notice of Default (NOD) with the county, informing the borrower of the default status.
3. Pre-Foreclosure: Borrowers may have a period to rectify the default by paying overdue amounts, often leading to loan modification or short sale.
4. Auction: If unresolved, the property is scheduled for a public auction where it is sold to the highest bidder, often the lender.
5. Post-Foreclosure: If the property does not sell at auction, it becomes Real Estate Owned (REO) and the lender takes possession.

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