The Foreclosure process begins if the homeowner fails to make payments of the money due on the mortgage at the appointed time. When investing in the foreclosure real estate market for the first time, you don’t want to lose your shirt. More commonly, lenders pursue a process called mortgage possession (or alternatively, “repossession” in cases where the bank originally sold the property too).
In a non-judicial foreclosure, the process follows the procedures spelled out in the mortgage (or deed of trust) that allows a trustee—the bank or mortgage company—to foreclose on and sell the property. If you don’t cure the default by paying the amount specified in the breach letter, the lender or loan servicer will officially start the foreclosure process.
All notices for the sales must be posted 21 days prior to the sale (i.e., 21 days before the first Tuesday of each month). Sometimes, a borrower may intentionally stop paying the mortgage because the property might be underwater (in other words, the amount of the mortgage exceeds the value of the home) or because he’s tired of managing the property.
Non-recourse loans: A non-recourse loan is a loan for which the lender’s only remedy in case of default is to repossess the property being financed or used as collateral. In that instance, the absentee landlord deliberately failed to pay the mortgage, thus inciting the mortgage company to foreclosure and eviction.
If the default is not remedied by the prescribed deadline, the lender or its representative (referred to as the trustee ) sets a date for the home to be sold at a foreclosure auction (sometimes referred to as a Trustee Sale). The lender will set a period of time for the homeowner to pay the lender the required amount past due and return the loan to good standing.