A foreclosure is generally what happens if the homeowner fails to repay a mortgage. Actually, this is a legal proceeding where the homeowner loses all the rights on the mortgaged property. Nevertheless, foreclosure sales Virginia take place if the borrower has failed to pay the debt or sell the home through a short sale. Because of this, the property is auctioned and if it does not sell at the auction, the lender assumes the ownership of that property.
Normally, if a lender loans some money without a collateral such as in the case of credit card, the lender can only take you to court for failure to pay. However, it can be hard to collect the money from the borrower. However, they usually sell such debts to collection agencies and write off the loss. Such debts taken without a collateral are considered unsecured.
For the secured loans, the situation is usually different. Although a lender can as well suffer some loss due to the default, a bigger portion of the loan can be recovered through seizing and selling the collateral used as the security for the loan. Therefore, foreclosures occur because the home acts as the collateral for the mortgage. In Virginia, there are several stages during foreclosures.
The initial phase is where a borrower fails to pay. The process starts when borrowers fail to pay the mortgage in time. The failed remittances may be a consequence of various factors including death, medical challenges, unemployment, and divorce. Nevertheless, when one encounters such challenge, it becomes necessary to get it to the knowledge of your lender as soon as possible. The borrowers may at times intentionally stop the payment of the mortgage because the value of the loans are higher compared to the worth of the property.
The second phase in a foreclosure is when the lender provides a public notice. When the borrower has missed the payments for 3-6 months, a public notice is given by the lender to the county office. The notice states that the borrower has defaulted the mortgage. The notice is intended to alert the homeowner of the danger of losing the rights to the property, and that he could as be evicted from that property. Depending on the state, a lender can post the notice at the door of the property.
The third stage is known as a pre-foreclosure where the borrower is given a grace period ranging anywhere between 30-120 days although that is dependent on the local regulations. At this point, the borrower can arrange with the lender through short sale or else pay the remaining debt. When the borrower pays the debt at this phase the proceedings ends at this stage.
The fourth stage is auctioning the home if a remedy is not found by the deadline. The lender or his representative sets the date for auctioning the property. During the auction, the house is sold to the highest bidder.
Finally, if the property is not bought by a third party at the auction, it enters the post-foreclosure phase where a lender takes the ownership of the home. However, bank owned properties may be sold on the open market by the local real estate agents or through a liquidation auction.
Normally, if a lender loans some money without a collateral such as in the case of credit card, the lender can only take you to court for failure to pay. However, it can be hard to collect the money from the borrower. However, they usually sell such debts to collection agencies and write off the loss. Such debts taken without a collateral are considered unsecured.
For the secured loans, the situation is usually different. Although a lender can as well suffer some loss due to the default, a bigger portion of the loan can be recovered through seizing and selling the collateral used as the security for the loan. Therefore, foreclosures occur because the home acts as the collateral for the mortgage. In Virginia, there are several stages during foreclosures.
The initial phase is where a borrower fails to pay. The process starts when borrowers fail to pay the mortgage in time. The failed remittances may be a consequence of various factors including death, medical challenges, unemployment, and divorce. Nevertheless, when one encounters such challenge, it becomes necessary to get it to the knowledge of your lender as soon as possible. The borrowers may at times intentionally stop the payment of the mortgage because the value of the loans are higher compared to the worth of the property.
The second phase in a foreclosure is when the lender provides a public notice. When the borrower has missed the payments for 3-6 months, a public notice is given by the lender to the county office. The notice states that the borrower has defaulted the mortgage. The notice is intended to alert the homeowner of the danger of losing the rights to the property, and that he could as be evicted from that property. Depending on the state, a lender can post the notice at the door of the property.
The third stage is known as a pre-foreclosure where the borrower is given a grace period ranging anywhere between 30-120 days although that is dependent on the local regulations. At this point, the borrower can arrange with the lender through short sale or else pay the remaining debt. When the borrower pays the debt at this phase the proceedings ends at this stage.
The fourth stage is auctioning the home if a remedy is not found by the deadline. The lender or his representative sets the date for auctioning the property. During the auction, the house is sold to the highest bidder.
Finally, if the property is not bought by a third party at the auction, it enters the post-foreclosure phase where a lender takes the ownership of the home. However, bank owned properties may be sold on the open market by the local real estate agents or through a liquidation auction.
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