Foreclosure Information
You may have heard the term foreclosure, but you may not know exactly what it means. Here are some of the most commonly asked questions:
Q: What is a real estate foreclosure?
A: A Foreclosure is the legal process by which a homeowner's mortgaged property is sold at public auction by The Common Pleas Court due to a default on the loan. The proceeds of the sale are applied to the mortgage debt. A homeowner is considered to be in default when they are behind in their payments by 30 days or more.
Q: What causes a foreclosure?
A: There are several factors that can cause a home to go into foreclosure. The most common is the owners inabilty to pay the mortgage due to a personal financial setback such as divorce, job loss, or illness. Sometimes owners begin to pay late and incur additional charges and late fees. They believe they will be unable to catch up, so they decide to simply stop paying altogether.
Q: What are the different types of foreclosure properties?
A: There are three different types of foreclosure properties.
1. Pre-foreclosures-These are properties that are still owned by the borrowers and are behind on one or more mortgage payments.
2. Auctions- These are properties that have been posted for public sale, and can be purchased at the foreclosure auction by a buyer who typically puts down 10% and makes arrangements to pay certain arrearages on the property plus other costs.
3. REO-The term for "Real Estate Owned" by the bank, S&L, or other lender. These are properties the lender has in inventory as a result of a preforeclosure arrangement or have purchased at auction.
In summary, a pre-foreclosure occurs when the lender begins the foreclosure process as a result of the defaulted loan. If the borrower cannot pay the arrears to bring the mortgage current, and does not sell the property, it will be sold at a public foreclosure auction.
In the case of loans insured or guaranteed by a federal agency, such as those that are HUD or VA, the properties can eventually become owned by the government. When these properties are foreclosed by the mortgagees, the agencies typically reimburse the lenders the loan amount and/or certain foreclosure costs. The government becomes the owner of the property, and arranges to sell the properties to the public.
Q: What can I do if I am being threatened with a foreclosure, or if I am currently in foreclosure?
A: There are some options that maybe available to you including the federal HAFA and HAMP programs . For more information, call The Wright Team at 614-416-2460, visit the "Stopping Foreclosure" tab on our home page, or fill out the form below.
Q: What impact can a foreclosure have on my life?
A: Foreclosures cause stress due to incessant, harassing telephone calls from creditors, embarassment because foreclosures become public record, and also destroy your credit rating-jeopardizing your ability to get loans, bank accounts, insurance, or employment in the future.
Click here for a glossary of foreclosure terms.
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