What is Foreclosure?

Foreclosure is a legal process in which you as a homeowner lose your home due to a violation of your agreement with your bank (or other lending institution). You are required to leave your home. Your home becomes the property of the bank.

A foreclosure occurs, typically, because you fail to make your monthly payment. But foreclosure may occur for a number of other reasons too, as an example, your failure to pay your taxes or condominium homeowner association dues to name two.

The process starts when you fail to make a monthly payment. Typically this is due to you experiencing some kind of hardship. Hardship examples are job loss, divorce, injury or death to name a few. Whatever the reason the payments stop being made to the bank.

The bank then notifies you repeatedly for 90 days, at which time, if some kind of workout agreement has not been made you receive a Notice of Default (NOD) in Deed of Trust States.

A notice of default is a legal document that makes the intentions of the bank to take your home clear if certain conditions are not met in a timely manner. Whatever the problem is, if it is not quickly corrected to the banks satisfaction–you could loss your home. In the documents are the time table to either pay-up completely, workout some kind of agreement, or loss your home.

Understandably most homeowners panic at this point. But the thing to do is to make a decision! And what should that decision be?

The homeowner has to decide whether or not they want to stay in their home or leave. Then they must come up with a plan of action to make what they want happen! This is crucial because many homeowners wait until it is too late, and a decision will be made for them.

Talk to your spouse! Talk to an attorney. Talk to a trusted family member or friend. Speak to several advisors. Then go to a quiet place and think and relax for several days and then make a decision.

If you are in trouble and want to keep your home you are going to have to fight for it. And if you decide for whatever reason that you can no longer afford to keep your home, there is a right and wrong way to handle that too.

There will be no perfect solution. You do what you think makes the most sense. You will not always be right. Whatever is going to happen–make a decision to best position yourself and your family after the storm blows over, instead of simply allowing the circumstances to dictate what your future will be.

Most people panic or do not quickly enough focus on their options and solutions. That is why it is so important for you to decide what it is that you are going to do–before a potentially very costly decision is made for you.

But what are your options if you want to stay in your home–and Im sure you do? The bottom line is:

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