Foreclosure

What is a Foreclosure?

When a homeowner defaults on their mortgage, the lender can often obtain a termination of the mortgagor's equitable right of redemption - in other words, the lender can sell the property without the homeowner being able to reclaim it at a later date. The property is then often sold at less-than-Market Value.

How to Navigate

Assuming the worst happened and your bank has foreclosed on you - what next? The bank can't evict you, don't worry. They have to get a court order of foreclosure and then auction the house to the highest bidder, who will then be the rightful owner of the property and will have the authority to evict if you haven't left yet. This whole process can take one to six months, so there is often time to make suitable arrangements.

First, the bank will send a "Notice of Intent to Foreclose" through the mail, while also starting court proceedings to make the foreclosure legal and binding. Usually the law will dictate that the legal notices must be published in the paper during this time, and unless the bank has demanded payment in full, you will have this period to settle with them.

Assuming you did not settle with the bank, the court will have proceeded with its legal obligations and issued an order to foreclose on your house. You'll then receive the legal notice of "actual foreclosure", which will be followed by advertisements and an auction of your house.

General Advice

Throughout the process, the bank will often try to contact you to discuss a possible deal regarding the payments. Foreclosure is not always the best outcome for the bank, so there may be opportunities for you to remain in your home or at least come away from the ordeal in a better position. However, since your details will likely have been published in the paper, you may also be contacted by those looking to help you through the experience, such as lawyers and mortgage brokers. Be aware of who is contacting you, though, as you may also be targeted by less-reputable characters looking to profit from your stressful situation.