It is not that when a homeowner falls behind on one mortgage payment, the foreclosure will get started. For a lender, to legally initiate the foreclosure process, the homeowner must fall 90 days behind on his mortgage. This is the time when a homeowner has the maximum options for stopping foreclosure. Once a homeowner misses his three monthly mortgage payments, the actual mortgage process starts.
Stage 1- Pre-Foreclosure
When a homeowner falls behind 90 days of his mortgage, the lender sends him a Notice of Default and this notice becomes a public record. This stage is also known as “grace period” and the homeowner is given a period of three months to cure his default. And the cure can be an arrangement with the lender, coming up with the cash and making all the payments you fall behind or selling the house.
Stage 2- Auction
When the homeowner remains unable to cure the default, the lender has the right to set a date for the house sale. This sale is known as a Trustee Sale. The notice of the Trustee Sale is sent to the homeowners and as well as is published in all the local newspapers to make certain that every interested person would get to know when and where the auction will be held. However, the auction is either held in the trustee's office or on the steps of the county courthouse.
Furthermore, in many states, the property owner has the “right to redemption”. According to this, if he comes up with the remaining debt at the time of the auction, he can stop the foreclosure process. This right is given up to the moment the house is sold at the auction.
Stage 3- Post-Foreclosure
In the case, no third party purchases the property at auction, the lender takes its ownership. And then, the property becomes a bank-owned property. Such a property is also known as REO.Moreover, the REOs can be sold in two ways- in the open market or at an REO liquidation auction.
"Being aware of all these stages and the available options, you would be able to save your house from the foreclosure. Also, you can consult an experienced real estate agent in Houston, like Caroline Allison, to know the latest foreclosure related trends."