Foreclosure is what happens when a property owner defaults on their mortgage. After missing payments, the lien holder (usually a bank) will seek to take back ownership of the property.
Foreclosure involves the owner relinquishing all rights to the property and any contents remaining inside. The foreclosure process can be stressful to both the creditor and property owner.
The process differs from state to state, so it's important that both the home owner and lien owner know the rules for their particular state. The general process is usually the same, with the main difference being when and what notices are mailed, the steps in reselling the property, and also the tax consequences to name a few.
Read more: The Foreclosure ProcessAre you about to fall behind on your mortgage, or already falling behind? Are you late due to unforeseen or unavoidable short term hardship?
If so, you may want to ask your lender about loan forbearance before you consider relinquishing your home through a short sale, deed-in-lieu, or foreclosure.
A loan forbearance is an agreement which you make with your lender which helps you temporarily renegotiate your present loan so that you can catch up over time.
During the time frame which is set, the lender will agree not to foreclose on you, and you will be given an extension on the time period of your loan or other loan modifications which will allow you to eventually become current on your payments.
Read more: Loan Forbearance