Foreclosures are a frightening experience that no one hopes to endure.
Unfortunately, with the current state of the economy and job losses, things are likely to go awry.
Even if things are running okay on your side and you just bought a new house, you must wonder for a moment, how do I know if my home is in foreclosure?
Foreclosures usually begin with homeowners receiving threatening calls from debt collectors on behalf of lenders.
And once a notice of default is issued, your house could be repossessed at any moment.
But don’t worry, this article will teach you all the tell-tale signs that your residence has been marked for foreclosure and the best way forward.
How to check if your home is in foreclosure
Usually, the bank or mortgage lender should supply you with a summons and complaint letter that shows your house is inching close to repossession.
If you haven’t been notified, then you can try the following ways to check the possibility of a foreclosure:
Call your lender
You have all the right to know all the details about your house.
As such, whenever you find yourself wondering if your house is listed for foreclosure, the first thing to do is talk to your seller.
If that doesn’t work, then try the other methods below.
Public auction listings
Lenders stand to profit or recoup their money if a house sells. And to expedite the process, they not only engage real estate agents but auctioneers as well.
What you need to do is visit their offices and request an inventory list of all auctioned properties. If your house pop’s up, then your lender is in the process of recovering it.
Property tax authorities
Lenders inquire with local tax authorities about the tax status of all their properties.
So if your home has any pending dues, they will report you as they inform the authorities of the coming foreclosure.
Therefore, if you visit tax authorities and give them your address, they can tell you if your house is scheduled for repossession or not.
Banks and mortgage providers keep a list of foreclosed homes on their websites. The purpose of the list is to advertise houses to individuals who want to buy new homes.
If you find your house listed, then you need to start thinking of a strategy to save it.
Real estate agencies
Local real estate agencies work with banks and lenders. As such, they have insider information that the public cannot access.
A good example is multiple listing services that only a few companies have access to. So if you talk to them, they may be able to check if your house is listed somewhere for foreclosure.
Real estate agents, auctioneers, and banks frequently list foreclosure in public prints. You should get into the habit of reading newspapers several times a week.
Advertised houses are found in the “Notice of Sale” section.
How to know the foreclosure status of your house
Here’s the thing, real estate agencies, public auctioneer listings and newspapers will only tell you if your house has been marked for recovery.
They will not indicate what status the foreclosure process is in. Gladly, the following ways can help:
Call your lender
Your lender should have enough information about your house foreclosure. If they know the status, they’ll let you know.
Unfortunately, some outsource property recovery to lawyers. In such a case, you need to ask for the attorney’s number.
Call foreclosure trustees
Foreclosure trustees are trusted by lenders to handle the property repossession process. These individuals are in most cases lawyers.
Once you have their contact, call them to inquire about the status of your foreclosure. They will give you all the details you need.
The foreclosure process is almost the same for both judicial and nonjudicial systems. It starts with the borrower failing to pay a month’s dues.
The timeline goes something like this (this might vary a little depending on your country or state):
First missed payment
Once you miss your first payment, the lender gives you a grace period (which varies from lender to lender).
At most, you have 15 days to clear the balance or risk additional late fees. At this point, some lenders can choose to report you to credit bureau agencies for late payment.
If you fail to clear your payment after 30 or more days after your due date, your lender will consider you to be in default and will start processing a notice of default.
This notice not only shows the pending balance but contains the intention of the lender to start pursuing a foreclosure as well.
This is the period between default and final repossession when you, as the borrower, fail to clear the pending balances by the date set on the notice of default.
During the foreclosure, your home gets listed on the auctioneer, bank, real estate agents’ websites, and other stakeholder sites that help financial institutions resale houses as quickly as possible.
The financier or their trustees will communicate the final date the auction will be held.
Upon the auction date, your home will be advertised for sale through a bidding process. Its value will be determined based on remaining balances, pending taxes, and liens.
If no one purchases it, it becomes the lender’s real estate property and will be sold as-is.
Time for eviction
Since the property is now under the lender or someone else, you’ll be issued with a notice of eviction which usually gives you a few days or weeks to leave the premises.
Should I leave my home while it is in the foreclosure process?
You don’t have to vacate your premises while the foreclosure process is running. Sometimes it takes a few months to even a year for it to complete.
But the moment the gavel hits the block against you, it would be time to pack and leave.
In some countries or according to your lender’s demands, you may be given a few days or weeks to vacate.
If you are found on the property past the issued deadline, your lender may be forced to launch an official eviction process.
Does a foreclosure hurt someone’s credit score?
A foreclosure can hurt your credit score severely. In fact, the bleeding starts even before the repossession completes.
Once done, it will take up to seven years for it to detach from your credit report.
So if you have a chance to fix things, please do so because a negative credit score will deny you the opportunity to secure a loan in the future.
Lenders won’t hesitate to initiate a foreclosure on a house with pending payments. You will need to clear up any balances to avoid imminent repossession.
Some loan providers include in their pre-foreclosure notice useful advice on how to save your home or local agencies that offer free or paid sound counseling.
Did you know that you can actually call your lender, explain to them your situation and they call off the foreclosure? You can do that.
It’s not uncommon for people to find themselves in financial hardship. However, expect lenders to request proof of hardship
As a last resort, if your home has been genuinely or accidentally listed for foreclosure, you really should find an attorney to get things straightened.
Lawyers can help put a stop to house repossession or delay the process and buy you enough time to recollect yourself financially.