Understand the Foreclosure Process

By: Lloyd

Planning an investment in real estate in Maryland? Do you know what the term foreclosure in real estate means? A foreclosure is a process by which a mortgaged property may be sold when a mortgage is in default. This means that if the borrower has loaned money from a lender or bank by mortgaging the real estate property, the lender may sell the property to recover the loan in case the borrower defaults to repay the loan. The foreclosure process starts when a borrower or owner fails to meet the financial obligation and the lender files a default notice on public record, this is called a notice of default.
Generally, there are people who are unable to pay their mortgage payments due to a various number of reasons which may be led by the lender foreclosing on the property. If you have mortgaged a real estate property in Maryland, the lender has the right to take your property and resell it if you fail to make your mortgage payments on time. The foreclosure has damaging effects on your credit history; it also becomes a matter of public record.


Did you know that foreclosure on a property occurs due to several reasons? The monthly mortgage payments may not be made, or a scam may be involved and the lender has decided to increase the loan. The lender will send acceleration letter requesting the full amount due and the specific due date when the amount has to be paid.
The foreclosure proceedings will begin immediately, incase the amount is not paid in the specified time and also, the lender will increase the loan. The lender will submit the foreclosure package to the attorney or trustee; depending on the state in which the property is situated, and legal action will be initiated. The period of time in which it takes a lender to foreclose varies by state.
As soon as the attorney receives the package, his or her fees and costs become part of the amount due and the total debt. A complaint is filed by the attorney and the foreclosure process begins. Once the foreclosure sale process takes place, the property is lost. During the foreclosure sale if the former owner remains in the property then they will be expelled out. There are chances that all the personal items will either be set out on the street or stored for a specified period of time. Also in some states, individuals can be sued for a deficiency balance, and wages and/ or assets can be attached.
The receiver or the owner can hopefully have the loan restored by paying off the default amount that is owed during the grace period determined. The other name for this grace period is 'Pre-foreclosure period'. In the pre-foreclosure or grace period, the borrower can also sell the property to another party. When the property in question is sold, it will allow the borrower/owner to pay off their loan and thus avoid the foreclosure process to proceed further. Once you are successful in avoiding the foreclosure this will help you to eliminate bad strikes on your credit history.
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