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FORECLOSURE Q & A What is Foreclosure? Foreclosure is a legal procedure whereby property used as security for a debt is sold to satisfy the debt in the event of default in payment of the mortgage note. The foreclosure procedure brings the rights of all parties to a conclusion and passes the title of the property to either the lien holder or a third party who may have purchased the property at the foreclosure sale. How fast can a foreclosure happen in the state of 90 to 120 days. How does foreclosure affect my credit? Foreclosure is the most damaging event that can happen to your credit, yes, worse than bankruptcy. It will have a negative impact on your ability to borrow money for many years. It is well worth the energy to avoid going to foreclosure. How can I avoid foreclosure? Make your payments. If you are having financial difficulties, tell your lender, let them know that you do not want to go to foreclosure and work with them to find a solution. This solution may be to sell your property, refinance, modify your loan, or negotiate a forbearance agreement. Can I stop the foreclosure? Yes. Bring the loan current, obtain a forbearance agreement with the lender or sale the home. My home was foreclosed on, can I claim a loss on my tax return? No. Losses from the sale or foreclosure of personal property are not deductible. When does the foreclosure process start? The foreclosure process starts when payments become delinquent. Who can foreclose on my property? Any lien holder who has a vested interest on your property, which was used as collateral, can foreclose. Can I be foreclosed on for tax liens? It would not be a foreclosure, it would be a tax sale. A tax sale can take place if you are behind on your property taxes and can be initiated by federal, state or local tax agencies. How will I know if the foreclosure process has begun? A Notice of Default will be recorded at the County Recorders Office and you will be notified by regular and certified mail. How much time is given to vacate the property once the foreclosure process is completed? Remember, once the Trustee's sale is complete, the title to the property is given to the new owner and your rights to the property are gone and the new owner gets immediate possession. |