Jeff Adams

Proceed With Caution



Posted: Thursday, September 10, 2009

by
RealEstateWebProfits.com

The foreclosure process is just thata process. The duration of this process varies from property to property and is contingent on an assortment of other factors. Investors interested in acquiring homes and properties that are being foreclosed upon should investigate as to what the entire process entails and the present status of the property is before moving forward on a potential deal. The mandatory laws, rules, and regulations that exist within each state also have to be identified and taken in consideration before moving forward.

The first hint that a home or property might be headed down the path of foreclosure is a missed payment. Sure, people are busy and a payment may be overlooked once in a while, but for the most part, a missed mortgage payment is often the first sign of a borrower's distress. To ensure that there are no inconsistencies in the payment schedule, a payment should always be made prior to the date on which it is due. A borrower should take every precaution to make sure that a late payment is avoided. How a lender will react to an initial late payment can vary. Most banks and lenders are understanding and are willing to work with the borrower to resolve any problematic situations. It is when the late payments start to be the expected pattern that they may become less willing to lenient.

Even if a payment is made on the actual day it is due, technically, if it is received by the end of the day, it is considered late. This may not be the standard that all banks and lenders adhere to, but it is common practice. However, especially in economic times such the ones we are in currently, most lenders have become accustomed and may even expect to receive a late payment here and there from their clients. The reality is that they generally do not mind if a payment is a couple of days late as long as the payment is made and their money is received. Most banks and lenders allow a grace period which is defined at their discretion (usually between 3-10 days) where they are willing to accept a late payment without applying any late fees and/or additional charges.

If a payment is missed and has still not been paid after the fifteenth day from which it was due lenders or landlords usually take some type of action to retrieve the payment due. Although this action taken may not involve legal proceedings, a phone call may be made or a letter may be sent requesting that the renter and/or borrower pay what is owed. At this time, it is probable that the lender will insist on an additional late fee charge to be applied to the payment amount.

A payment that still has not been received after about forty five days signifies a definite problem. At this point the borrower has not only missed one payment but is well on his/her way to missing yet another one. Homeowners in this situation are at serious risk of breaching the initial contract. A letter demanding either payment options or other specific instructions regarding moving or eviction is usually sent via certified mail. At this point, the lender or bank has take legal precautions and the official foreclosure of the home or property is just around the corner.

Around day ninety, which is roughly about three months, a lender directs the case to the foreclosure department it is associated with and the foreclosure process is legally put into effect. Lawyers and attorneys are now a part of the proceedings. The foreclosed home or property in question is published and is formally on the market, anxiously awaiting to be an investor's next great deal.

This Article has been viewed 10 times. (Not updated in real-time.)
No comments yet.
We want your comments! If you can read this, you don't have javascript enabled, so you can't use this comment system. Please enable javascript.