For people who have just recently encountered the term “home foreclosure”, it may be hard to grasp its full meaning and implications. The general knowledge just states that the home foreclosure process involves the bank taking away the home of an individual who is unable to pay for their dues. In essence, that is a very much correct description of the matter. Actually, it is the simplest explanation for it.
However, for those interested to know more, it may be good to understand how the process of foreclosure really works and how it happens. The event that would trigger the start of the foreclosure process is the moment that a home owner fails to pay his or her mortgage fees for the third consecutive month. Prior to this, he or she would have received warnings and requests for payment when they are unable to pay their dues on time.
At the third time that a home owner is unable to pay his or her dues, the bank or lending institution would then issue a notice of foreclosure to the home owner and at the local newspaper. After this, the parties involved shall meet in court to formally issue the foreclosure and to set up a date for the auction of the property.
At the auction proper, anyone who is interested and who has the funds can bid to get the house. Usually, it is the lender who will be able to acquire the property. However, if in the next months or year, the original home owner can get the funds, he or she can buy back the property they owned originally.
Foreclosure is a very taxing process. In order to avoid it, you can take precautions such as getting the cheapest fixed rate mortgage available which you are certain you will be able to afford through many circumstances.