What Is Foreclosure?
Foreclosure is what happens when a homeowner or borrower fails to pay their mortgage payments. Foreclosure also happens when a borrower or homeowner fails to pay the property taxes. Essentially, it is the legal process that a lender may do to take back the property from a homeowner after failing to pay the principal and interest payments on their mortgage. A home in foreclosure is the property that is currently going through the foreclosure process and a foreclosed home or REO (real estate owned) is a property that has gone through a foreclosure process and is now owned by the bank or lender. Overall it is important to understand the foreclosure process in your state.
How Do Foreclosures Work?
There are two kinds of foreclosures. A non-judicial foreclosure doesn’t require a court action but a judicial foreclosure involves the lender taking the homeowner to court and allowing the homeowner to contest the foreclosure. Under federal law in Wisconsin, a lender must wait until you are over 120 days delinquent on your payment before starting the foreclosure process. This step is what is known as pre-foreclosure and it is a great time ask your lender for alternatives to foreclosure. You may be able to stay in your home at this time if you work out a repayment plan with your lender. To begin the process the bank files a lawsuit and you will be served a summons and complaint. You then have 20 days to respond to the court. If you fail to answer the court the bank can get default judgement from the court, but if you answer doesn’t get a default judgement. Instead the bank gets a motion requesting a judgment in favor of the bank which then may lead to a trial. If the bank gets a judgement against you, the court orders a foreclosure sale. There are essentially six phases to a foreclosure.
What Are The Six Phases of Foreclosure?
- Missed Payments. This is when the homeowner has missed at least one payment. After two missed payments the lender may send a Demand Letter. Although this is more serious than a missed payment letter, the lender is still willing to make payment arrangements to work with the homeowner.
- Public Notice or Notice of Default (NOD). This notice is sent after months of missed payments. This is when the lean is given to the lender’s foreclosure department. This department is in the same county that the property is located in.
- Pre-foreclosure or Notice of Trustee’s Sale. This is when the loan has still not been paid within ninety days after the NOD. This is when the lender needs to publish a notice in a local newspaper for three weeks telling the public that the property will be available at public auction. Public auction is where the property is awarded to the highest bidder. The title is then owned by the highest bidder who is now entitled to immediate possession of the property.
- Trustee’s Sale or Auction. The auction is open to the public and often times takes place right on the courthouse steps of the county courthouse. It may also be held online, in a conference room or convention center. At auction the minimum bid is normally set at the balance owned on the loan.
- Post-Foreclosure or Real Estate Owned (REO). Many times the property is not sold at auction and the lender now becomes the owner. As owner of the property the bank must pay property taxes on the property. When you add up all the costs incurred during the foreclosure process it is easy to see why a bank wants to get rid of the home as soon as possible. This is when the bank attempts to sell the property on their own using a broker or REO Asset Manager.
- Eviction. Often times a borrower may stay in the home until it’s been sold through auction or later as a REO property. This is when an eviction notice is sent to the home demanding that anybody living there needs to vacate the property immediately.
Why Do Homeowners Go Into Foreclosure?
Nobody buys property with the intention of defaulting on their loan. There are many reasons people fail to make their payments. Unexpected circumstances seems to be the most common. These circumstances would include employment issues (getting fired/laid off or quitting a job), racking up excessive debt, going through medical emergencies, taking on large unexpected expenses due to death or divorce or other common reasons. Another reason if your mortgage has an adjustable interest rate and your mortgage payments increase. Typically your monthly mortgage payment rises because property taxes and homeowners insurance premiums are paid through your monthly mortgage payments. This is why it is important for homeowners to understand their mortgage terms before signing on the bottom line. You do not want to be caught off guard or unprepared for these unexpected but common changes.
What are Foreclosure Consequences?
Overall, many lenders tend to try and make arrangements with homeowners to get caught up with their loan to avoid foreclosure. It can be difficult to get caught up on payments after you miss so many payments. This can be a very stressful time in your life and it is important to make the decision to save your credit early on. If you sell your house before the foreclosure auction you can repair what is left of your credit. Many home buyers just want to help people get their life back faster so you can put that rough patch behind them.
For the homeowner, a foreclosed home can remain on their credit report for up to seven years however, impact of the foreclosure has on their FICO score lessens over time.
Do You Need To Sell Your House In Foreclosure?
Are you facing foreclosure and need to sell your:
- house as-is
- property with tenants
- property with pets
- fixer upper house
- abandoned house
- house in pre-foreclosure
We Can Help You Sell Your House Foreclosure Fast And Buy It From You With Cash!
Selling your house can be stressful with creditors calling you non-stop. When the bank calls everyday and your power is about to be shut off it’s really hard to control the domino effect of life. You can’t make it to work without gas in your car but you can’t put gas in your car unless you can make it to work. It’s a catch 22 we all face at some point in our life. If you add in a death in the family or tenants that wont pay their rent the situation can become unbearable. We are here to help you get rid of all of those problems and give you a way out. We can buy your house as-is with cash even if you had pets! Call us today so we can help your house in pre foreclosure (262) 288-0580.
I let my tenants have a dog and had to evict them for non-payment of rent. They trashed my house and I couldn’t afford to fix it before I sold it. I am so thankful Tony and Sarah helped me sell my duplex. They were very professional and gave me a fair offer. I would recommend them to anybody!
“List My House For Sale”
- Have 4-6 months? A listing may put more in your pocket
- Save your credit from the wreckage of a foreclosure
- See if your situation qualifies
“Get A Fair Cash Offer Today”
- Let us know about your situation and your house
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Want To Learn How To Sell Your House In Foreclosure?
Did you receive your pre foreclosure letter in the mail? Are you receiving threatening letters and phone calls from creditors? Are you looking to sell your house in pre foreclosure? This can be a very stressful time in your life and we have helped many homeowners in your very position get out of their tight situation before it was too late.
So, are you in foreclosure and want to learn how to stop foreclosure now? We’ve created free online guides to help homeowners just like you find out your options on getting out of the sticky situation you’re in right now. You aren’t the first person to go through a foreclosure… and won’t be the last. So don’t feel ashamed. It happens.
The best thing you can do right now is to educate yourself on your options. For some people selling your home is the best option (we’ll make a fair all-cash offer on your house today, just let us know about your situation here, sometimes we’re able to help homeowners STOP FORECLOSURE completely, and sometimes there are other options. So, complete the form below to get your free foreclosure guide.