Typically, the foreclosure process is initiated by the First Trust holder. They are endeavoring to mitigate their loss by disposing of the property and removing the non-performing loan and asset from their books. But the bank cannot simply take over the property. There are formal procedures that must be followed. Most people have seen the legal notices, placed in the newspapers, announcing a sale of certain property by the Bank’s substitute trustee at a certain date on the steps of the courthouse. Folks showing up for the auction, in search of a great deal, are surprised to find that the lender usually sets the opening bid at the amount the previous owner owed. Finding no bidders willing to make that high an offer, the Bank then formally becomes the “owner” of the property, and now has full legal rights to do as they wish with the property. It is the legal process, through which they must go to obtain full legal ownership. On rare occasions, the bank may elect to take a calculated loss at the auction and set the starting bid at less (sometimes much less) than was owed, and the property is sold to an individual or investor.
Once the property is sold at auction, the sale is final and eviction process commences. The Sheriff will post a notice on the front door and within the few days prescribed by law, officials will enter the property and remove all remaining (clothes, furniture etc.) personal property and place it at curb-side.
"As your CDPE Agent, we explore every option with you and work toward a resolution to avoid the nightmare of foreclosure."
In the event you allow your property to fall to foreclosure and auction, you will have to report this on future mortgage applications. Many employment applications also require you to disclose a previous foreclosure, no matter how long ago. You will also experience a significant reduction in your credit score by as much as 300 points or more, and the foreclosure will remain on your credit reports for at least 10 years. Although not routine, the banks retain the right to pursue what is called a "deficiency judgement" against you now or in the future, to sue for their losses. Your current and future employment may also be affected by a foreclosure. Employment in law enforcement or sensitive positions requiring security clearances will be immediately in jeopardy, and in most cases will be immediately revoked. Employment in positions of financial trust will also be in jeopardy as most employers routinely run credit reports on employees in these positions. "While it may not seem like it now, there will come a time when these financial troubles will pass and you will feel better knowing you did everything possible to avoid the devastating consequences of foreclosure."
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