What is the Foreclosure Process?

• A legal foreclosure proceeding repossesses real property held by a mortgage holder and returns the property to the loan holder to be sold for the amount of the unpaid loan. The lender may also simply take possession of the home, without posting the home or business for sale. Foreclosure proceedings mandate an amount of time, set by state or local laws, for the borrower to bring the loan current by meeting the promised payments and paying any late fees or penalties. Foreclosure typically follows when a loan becomes classified as seriously delinquent, defined as a loan past due for 90 days or more.
  
  

Who is at Risk for Foreclosure?

• Anyone with a home mortgage or business loan secured by real property, including homes and business structures, is at risk of foreclosure when loan payments become overdue. Lenders send past due notices when loans payments fail to be made on the stated due date of the loan contract. Lenders send delinquency notices after a series of missed deadlines. Mortgage holders begin foreclosure proceedings, sometimes called repossession proceedings, when the borrower defaults by failure to make the payments. Borrowers with modified home mortgages, or defaulted loans brought current, have a higher risk for future foreclosure than homeowners with a steady record of on-time payments. Homeowners in geographic regions with high unemployment have higher levels of foreclosure than other areas. RealtyTrac lists Las Vegas, Nevada; Chicago, Illinois; Phoenix, Arizona; Miami, Florida; and Los Angeles, California, as the U.S. cities with the highest foreclosure rates in January 2011.
  
  

How Do I Stop Foreclosure Proceedings?

• The fastest way to stop foreclosure proceedings involves paying the amount of past due funds and any penalties during the amount of the loan grace period. This period varies with the regulations of each state. If payment isn't possible, the U.S. Department of Housing and Urban Development (HUD) reports that working with a lender to modify the amount of the loan payments may provide another option to foreclosure. Refinancing may also offer an option to halt the foreclosure, depending on the individual circumstances and the willingness of the bank to offer a new home mortgage.
  
  

How Do I Avoid Future Foreclosures?

• Contact a qualified mortgage counselor immediately when finance problems first occur. Do not avoid bank notices and obtain any agreements to modify a loan or payment in writing. The U.S. Department of Housing and Urban Development suggests using free federal, state and local foreclosure resources for assistance. Another HUD suggestion includes contacting national foreclosure assistance agencies, including HOPE NOW and the Homeowner Preservation Foundation, for seasoned advice in dealing with banks and suggestions for recommended actions to slow or halt foreclosure filings by the lender. The resource section of this article provides links to non-profit agencies providing assistance with foreclosures.