Buying your first or next home is a wonderful feeling. You may buy a property to live in or use for investment. Once a home is yours, you can do just about anything with it.

Your rights as a homeowner diminish when the foreclosure process is started.

The economy has its ups and downs and you may struggle financially in the process. Bad things may happen and you may physically or emotionally struggle in the process.

Due to various reasons, one in every 200 homes is foreclosed.

Still, there is something you can do to stop the foreclosure process. If you can understand how the process works and the rights you have to fix it, you can prevent it.

Payment Goes on Default

Even just one missed payment on your mortgage puts your account on default. Most lenders will notify you that you have missed a payment and offer a grace period.

How much grace period you are offered depends on your lender. Normally, it’s about 15 days. Once this period passes, you will be assessed a late fee.

After two or three missed payments, your lender will send a demand letter. This is a more serious noticed to inform you of the missed payment. Still, because this is the initial process, most lenders are more than willing to help you get caught up on payments.

They will offer potential loss-mitigation solutions to help both parties find a favorable outcome.

Notice of Default Is Sent

When three to six months pass and you still have not made a payment, a notice of default (NOD) is made. Your lender will submit this to the County Recorder’s Office at the courthouse.

You will also receive a copy of the form through your lender via certified mail. At this stage, you will be given four months to make payments and get back on track during this reinstatement period.

The foreclosure process varies from state to state. If you are in a state where judicial foreclosures are done, the lender will make a lawsuit, or complaint, against you. The lender will need to submit proof they tried to work with you on making up payments.

You have the right to contest their claim and defend yourself. Writing a hardship letter will help strengthen your case. It will explain why you had trouble paying, and how to can sort the issue.

Should the court rule in favor of the lender, the property may be sold legally.

Notice of Trustee’s Sale Created for Foreclosure

If you still fail to send payments after 120 days have passed, the lender may decide to start the foreclosure process. This rule cannot be altered by the lender according to the federal Consumer Financial Protection Bureau (CFPB). This is also recorded at the courthouse’s recorder’s office.

You will be provided a “notice of intent to foreclose” letter to inform you the foreclosure process has started.

The lender is required to create a notice in the local newspapers three weeks straight. Until then, the property cannot be auctioned. After three weeks, you’re still given a 5-7 day opportunity to avoid the auction and foreclosure.

Trustee’s Public Sale Is Placed

The lender, or the representative, then creates opening bids on the sale. The pricing is calculated on the current loan balance as well as liens, unpaid taxes, and cost of sale. The property is given to the winning bidder.

The winner is then recognized as the official owner and is given the trustee’s deed. By this time, you will be given a date, based on the new owner, to move out. Some will give you a week or two and some may only give you a few days.

Property Becomes Real Estate Owned

In the event the property isn’t sold during the auction, it is now real estate owned property (REO). Your original lender is now deemed as the owner.

Through their own efforts, they will attempt to resell the property using several outlets. In order to aid in reselling the property, they may remove certain expenses to lower costs. This will make the property more attractive.

Eviction Starts

Once the foreclosures property is sold, you must vacate the place. You may or may not be allowed to stay at the property until the lender is ready to clean it for selling. You are given time to take your things.

Anything that is left at the property will get thrown out or placed in storage for a fee at the expense of the owner. Not leaving the property within the given allowance can cause additional problems. You may be forced out by the police by this point.

Preventing the Foreclosure Process

You are given several months before an official foreclosure is made. If you can, you should take advantage of that. It is best to do whatever you can to stop the foreclosure process from taking place.

If you are experiencing financial struggles or were involved in an accident, try to work things out with your lender first. Inform them of your situation and find ways to fix it. Make sure to calculate and confirm the exact amount you owe.

You can ask to reinstate the loan or request a forbearance agreement. If you’re doing everything to keep your property, and your lender isn’t helping, you should find foreclosure defense assistance. There are many laws in place to help homeowners keep their homes.

If you have exhausted your choices, a better ultimatum, rather than being foreclosed on, is to sell the place on your own. You can start a short sale on your own or with a realtor or an attorney.

Keeping Your Property

Your home is a shield that you come back to every day when you work. It is there to protect you and your family during harsh weather and help while providing security.

You should do what you can to offer the same protection to your home. Preventing the foreclosure process is important keeping your rights as the homeowner. It’s comforting to be able to enter your property to know it’s yours and relax.

It’s stressful to have to worry about calls and letters from your lender and the courthouse telling you to move out. It’s sad when you’re left with no choice other than to move out.

There’s so much you can do to keep your home even if you’re struggling. For more help with homeownership, be sure to browse the rest of this site.