Falling behind the mortgage payment can lead to foreclosure. Foreclosure is a legal procedure of taking property possession for an auction sale. Once the home is sold at an auction, take note that you’re not anymore in foreclosure. After that, you need to find a place to reside and begin fixing your life financially.
Below are the things to do after foreclosure;
Vacate the property voluntarily
After a foreclosure, you have to voluntarily vacate the property. By doing this, it helps eliminate an eviction lawsuit. Remember, having a record of foreclosure may delay the ability to find a rental lease or perhaps getting a new residence. On top of that, this may cause severe hardship in finding a place to reside. When the current owner gets the property, she/he executes 3-day notice to leave the property. By vacating before and after the 3-day period prevents the eviction lawsuit.
By not vacating the property voluntarily can result to an eviction lawsuit by the current home owner. After the 3-day notice that you are still residing in the property, the owner will file unlawful detainer lawsuit in the court near your residence. You are entitled for 5 days respond to the accusation. A court trial is scheduled within twenty days of notice. After the judge signed the eviction, you will receive a notice of 5 days to leave the property before the lockout order from the sheriff and replaces the locks.
Depending on the kind of foreclosure, you are liable to obtain the right of redemption. In the judicial foreclosures, the lending company will summon you to the court to obtain property possession. The judicial foreclosure allows the lender to follow the judgment for the deficit balance of the property after the public auction. You will get the right of redemption in the judicial foreclosure. This provides you a specific period of time to buy a home from the winning bidder for the property auction.
In California, homeowners are given one year to work out the right of redemption in the judicial foreclosure. The common foreclosures here are called non-judicial and homeowner doesn’t need to obtain the right of redemption.
After the foreclosure and property auction, start over again and build your credit standing. The credit report shows a record of foreclosure for 7 years from the start. As the record goes, this lessens the credit report. You will experience various denials in mortgage applications and credit applications for more than a few years after a foreclosure. This will continue until you have established a decent credit history.
The traditional mortgage lenders will deny you for 7 years until they will see that the foreclosure disappears. However, the government-backed mortgage loan requires 3-5 years following the foreclosure are approved.
How to avoid foreclosure?
You can only avoid foreclosure if you take immediate action to save your home. Start contacting the bank that service your mortgage loan when you think there is a financial issue rather than to wait a foreclosure notice.
Even though it’s possible to acquire a mortgage modification, it is still advisable to consult an expert who can assist you about the problem.