This is the process by which a lender can recover the amount owed on a defaulted loan by taking possession of (repossession) or selling a property securing the loan. This process begins when the owner of the property defaults on loan payments, usually a mortgage. The lender then files a public default notice and the process begins.
Options for resolving the debt…
- The debt is paid outright – The owner pays the debt off. The debt can now be reinstated during the pre foreclosure grace period. Alternatively, the house is sold to a third party to pay the debt and avoid a blemish on the borrower’s credit record.
- The house is sold to a third party at public auction at the end of the pre- foreclosure period.
- The lender takes ownership of the property either by buying it from the owner in pre-foreclosure or when it goes to auction.
Purchasing a property in the foreclosure process is gaining in popularity. If this type of purchase interests you, ask you Real Estate Agent for more information.