by Don Burnham
At any time any foreclosure case is registered, a structured process follows. In a judicial state, foreclosure begins as it is filed; in a non-judicial system, foreclosure begins once the Notice of Trustee Sales or the Notice of Default is filed. The beginning marks the pre-foreclosure stage, or the preparation before the actual handling of the case -the time when you can make the most money out of the case.
Ordering a Trustee Sale Guarantee (TSG): This is another name for a Title Report.
There must be a notice sent to every single person with interest in the property being foreclosed -As in anyone and everyone with a lien on the property, even a mechanic’s lien, or anyone with a second mortgage. This is to inform all parties concerned with the real property.
Substitution of Trustee-Non judicial legal process: There’s always a Substitution of Trustee. To be clear, here are the 3 key parties in this type of process or case:
The Trustor, or the person who borrowed the money, The Trustee, the beneficiary, The Trustee, who handles all the transaction pertinent to foreclosure
You may see a Substitution of Trustee posted at the County Recorder’s Office. This trustee only handles foreclosures and will follow the process to the end.
Posting of legal notices -It is required by law, that information that can be made public be posted. These legal notices offer an overview of the case including the parties involved and the property being foreclosed. Some states even have “county recorders” or special legal newspapers on which these kinds of notices are posted for public consumption. It’s also imperative to post a notice on the property itself.
Maintaining constant contact -Constant contact should be maintained with the title company to ensure that no liens remain attached to the property being foreclosed. Bankruptcy can put a halt to the foreclosure, as bankruptcy is handled by federal law, superseding state law.
The Credit Bid -The credit bid is the set price when auctioning off the property. This is usually prepared by the mortgagee, or the beneficiary.
As dictated by state law, the credit bid is determined by the principal balance plus arrears:
Bank Interest, Penalties, All legal fees. Arrears can include homeowner fees, and second mortgages. In a judicial system, it’s the attorney who will handle the preparation of the credit bid; in a non-judicial system, it’s the trustee.
Make payment and reinstate the loan: The owner can perform this task. Suspend or cancel the sale at any time: The beneficiary or mortgagee can do this, if suitable arrangements have been worked out with the owner beforehand
The Notice of Trustee Sale. This contains the time and place of the auction. This should also contain the proper legal descriptions of the property -which can be obtained at the County Tax Assessor’s Office. Take care to be sure that the description matches the actual address; it should be up-to-date, as addresses change overtime.
The Due on sale clause. This is a part of the mortgage that demand full payment of the loan, should the house be sold or transferred. The lender has no power to halt the sale, but can legally demand for full payment -which, in the lender’s case, has the same financial effect.
If there is no specified due on sale clause, then the loan will be assumable -even if the lender does not give their due consent. In the same way, older FHA loans and older VA loans are assumable even if the lender does not give consent. You may be asking now: what considerable effect will this have on the selling of a foreclosed property? The effect is simple and very beneficial. The bank will most likely be not privy to the transfer, provided you are up-to-date on payments as you acquire the warranty deed at the timeframe of pre-foreclosure. You can buy the property, and then sell it as soon as you can or even later on. You can then pay off any remaining deficiencies in your loan easily and in the required timeframe.
About the Author:
Get an insight into structured foreclosure process at
http://www.weknowthewayback.com by
Don Burnham an entrepreneur, author, real estate investor, teacher and speaker and take a wise step while you buy or sell a property today!!!
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