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 the TSG or Trustee Sale Guarantee -also known as the Trustee 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: In a non-judicial state, there is always a Substitution of Trustee. This stems from the three tiered approach, which consists of:
Trustor, borrower of the money, Trustee, a beneficiary, Trustee, the one entrusted to handle the case or oversee the process
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.
The Posting of Legal Notices -As required by law, as the affair concerns land and property, it should be made public through a legal notice. This notice contains only the information valid for public consumption; in other words, nothing that might be detrimental to the case or the parties involved. The notice appears on newspapers, publications, even special county-owned legal publications, and on the site of the property itself.
Maintain continual contact: Continual contact is maintained with the title company to make sure no other liens are attached to the property. One thing that can stop the whole process is bankruptcy. Bankruptcy is a federal filing lawsuit that supersedes state statute.
Prepare a credit bid: The beneficiary or mortgagee prepares a credit bid, which is the starting bid/amount at the auction, depending on the state and the state statutes.
In most states, the credit bid will include the principle balance plus all of the arrearages, including: Bank interest, Penalties, Legal fees
Other arrearages can include second mortgages and homeowner’s association fees. In a judicial state, the lawyer for the mortgage company/bank will prepare the credit bid. In a non-judicial, the Trustee will prepare the bid.
Payment-includes reinstating the loan, a task reserved for the owner. Suspension or cancellation of the sale -This can be done at any time by the mortgagee or beneficiary, provided prior arrangements have been made with the owner.
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.
Due on Sale clause. This is a clause in the mortgage that legally binds the borrower to pay the lender in full -should the property be sold or transferred at any time. At this point, the lender holds no authority to stop any sale or transfer, but instead has the authority to legally demand full payment. Financially speaking, for the lender, this has the same effect.
Should there be no due on sale clause, the loan is usually assumable even without the consent of the lender -as older VA and FHA loans are. This will have a considerable effect on the sale of the foreclosed property, an effect that will be beneficial to you. The bank will, in all likelihood, be unaware of the transfer, if you get the deed during the pre-foreclosure stage of the process -provided all payments are being met. If you acquire the property and immediately sell it, or even later, the requirements for paying off the loan can easily be fulfilled then.
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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