The Steps in a Process of After Foreclosure

After foreclosure occurs, a property is usually kept as a security against a debt that must be paid by the homeowner, according to their deed of trust. A house is usually foreclosed upon due to the failure on the part of the borrower to pay their monthly payments on time.

At this period in time, the property owner is the highest bidder at the auction, which is usually done legally. After a foreclosure occurs, a borrower is usually dispossessed of their home. A foreclosure usually damages a borrower’s future credit rating severely. Mental trauma usually looms on the debtor during this time.

After foreclosure, the debtor still has a right to buy back the property on the condition that he can pay what he owes against it in full. The homeowner has the same right as anyone else to take possession of the home.

If he fails to buy back the dispossessed property due to his failure to pay the full amount, he should prepare to leave the foreclosed property. If the property foreclosed is his house, he should arrange for an alternative house as soon as possible. He can stay in the house, no doubt, until he gets evicted by a court order.

But, moving out as soon as possible would probably be a better idea. If he continues to stay, the lender can request a writ of possession from the appropriate court to evict him forcefully. The writ of possession the lender attains from the court will power the lender to evict him, with force if required, in a matter of weeks. The writ is usually served by a Sheriff

Only after the procedure of transferring the deed to the buyer is completed, can the buyer file an eviction notice to remove the debtor in the appropriate court. After a claim is filed, the procedure may take from a couple of days to a couple of months to complete. The eviction process usually takes a longer than a claim file.

After foreclosure, the original owner has to pay the interest owed on the mortgage and other foreclosure costs. He will get any surplus,however, if there remains any. This is not the end of his agony, however. The lender will look into the matter whether the amount procured from the sale is enough to pay off the existing mortgage with the costs of a foreclosure lawsuit and the foreclosure itself combined.

If the amount is less, the lender will file a separate lawsuit to obtain a deficiency judgment. The debtor has to pay the required balance, granted that the deficiency judgment was in favor of the lender balancing the debt.

After foreclosure, the debtor may find it hard to get a new mortgage. Thus, after foreclosure his credit rating will be reduced significantly.