Forecloure: It's A Process
I was assembling a new set of drawers for my office today and at times got frustrated. After all, the instruction manual was not the greatest and while I appreciated the visual aids in the instruction book like the next person, all of the screws started to look the same after a while.
Putting two drawers on wheels took about five hours to put together. Definitely not a personal record or a land speed record, but while I was sitting on the floor of my office getting upset over silly screws, nuts and all of those other parts, it made me think about the foreclosure process that so many people are dealing with today.
Foreclosure is not a bad 11-letter word. Instead it is a process that the banks put homeowners through when the homeowner is delinquent on their mortgage. This process is definitely not personal. Instead, it is business decision lenders make because they need to make sure they are covering their bottom line and protecting their investors.
The foreclosure process starts some time after a borrower falls behind in their payments. Depending on the lender, after a certain length of time in which a borrower is behind in their payments a notice called a Notice of Default will be sent out to the troubled homeowner.
This Notice of Default (NOD) appears scary at first. The bank not only sends multiple copies through regular mail, but they also send a copy or two (or more) via certified mail to make sure the borrower receives it. Sure, the NOD is sent out in a squarish envelope that is much bigger than your typical #11 sized envelope and appears scary at first. Yet I have never heard of or seen anyone who has received this NOD contract a life-threatening disease or become subject to a public flogging. Instead, this is just a method of communication for the bank to let the borrower know that they need to start making some decisions about their property.
As of today, June 7, 2011, receipt of this NOD is the beginning of a 111 day process in which the borrower has to either bring their account current, sell their property or file a bankruptcy to save the property. The 111 days breaks down as follows:
NOD = 90 days
Notice of Trustee's Sale (NOTS) = 21 days
If after the 90 days of the NOD period the borrower has not reinstated their account by paying back the arrears, then the bank will mail out the NOTS. This also will appear scary at first as the bank will send out many copies and also send out a few copies via certified mail. Once again these words look intimidating as this is the bank's way of communicating to their borrower that if they do not bring their account current soon, well, then they are going to sell the property at a Trustee's Sale and the borrower will no longer own the property.
There are more details and nuances about this process that I can explain if you contact me or I can refer you to a real estate attorney who can provide legal advice, but the bottom line is that initiating the foreclosure process is a business decision from the bank and not a personal attack.
Don't get me wrong. I am not an attorney and do not work for a bank. Instead at times I will curse at banks openly because they can be frustrating to work with. Yet just like going through the instruction manual today for my drawers, once you know how the process works, it is not nearly as intimidating as you first think.
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Posted at 03:51PM Jun 07, 2011 by Lara Boyko in General | Comments[0]