Wednesday, March 1, 2017

Learn More About Foreclosure Sales Virginia

By Anthony Collins

A foreclosure is generally what happens if the homeowner fails to repay a mortgage. Actually, this is a legal proceeding where the homeowner loses all the rights on the mortgaged property. Nevertheless, foreclosure sales Virginia take place if the borrower has failed to pay the debt or sell the home through a short sale. Because of this, the property is auctioned and if it does not sell at the auction, the lender assumes the ownership of that property.

Usually, when a bank loans out some money without any security as the case for a credit card, a lender may only take the borrower to court for the failure to pay. Nevertheless, it would be hard to collect back the money in such a case. As a result, lenders sell such unsecured debts to the collection agencies and the write it off as a loss. Debts without a security as termed as unsecured.

However, the case for secured loans is different. Although the lender might incur some loss in the case of default, a large portion of the debt may be recovered by seizing and selling a property used as the collateral for the loan. Foreclosures, therefore, happen since the home is used as the security for the mortgage. However, there are several stages for foreclosures in Virginia.

The first stage is when the homeowner misses payments. It begins when the borrower fails to make the mortgage payment on time. That may be due to various hardships such as divorce, unemployment, medical challenges or death. However, when faced by such a situation, it is essential you talk the lender immediately. In some cases, the borrower may intentionally stop paying the loan since the mortgage is higher than the value of the property.

The second phase in a foreclosure is when the lender provides a public notice. When the borrower has missed the payments for 3-6 months, a public notice is given by the lender to the county office. The notice states that the borrower has defaulted the mortgage. The notice is intended to alert the homeowner of the danger of losing the rights to the property, and that he could as be evicted from that property. Depending on the state, a lender can post the notice at the door of the property.

The third phase is referred to as pre-foreclosure. This is where borrowers are given some grace period of between one to four months depending on regulations in the area. At this stage, borrowers may make arrangements with lenders regarding repaying outstanding amount or arranging for short sales. When borrowers pass their debt under such arrangements the process then ends.

The fourth stage is auctioning the home if a remedy is not found by the deadline. The lender or his representative sets the date for auctioning the property. During the auction, the house is sold to the highest bidder.

Finally, if a property has not been purchased during the auction, it goes to the post-foreclosure stage where the lender assumes the ownership of that property. Bank owned properties, however can be sold through an open market by agents in local real estate or through liquidation auction.

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