When Does Foreclosure Begin?

Foreclosures are arguably the worst thing to happen to a homeowner. Essentially, foreclosures are the legal process in which the homeowner's interests in the mortgaged property are revoked due to their inability to make a number of mortgage payments. As a result of a foreclosure, the mortgaged property is put up at a forced sale, generally at a public auction, in which the proceeds of the sale goes to pay off the mortgage debt.

Owning a home is a great investment that is loaded with great financial benefits. Unfortunately, most homeowners are unable to pay for their home with one payment and usually require borrowing money from a lender. Although, lenders undergo a vigorous process to ensure that the prospective homeowner is able to make their financial commitments, there are situations in life where individuals find themselves in fiscal trouble. This can be caused for a variety of reasons, but if those individuals also own a home, they may be in trouble unless they have the required amount of savings to fulfill their responsibilities.

Financial Difficulty

For homeowners who have found themselves in financial difficulty, the most common question that they ask is, "When does foreclosure begin?" For the most part, foreclosure proceedings commence after the third missed mortgage payment by a homeowner. For the lender, three consecutively missed mortgage payments are a sign that the homeowner is fiscally unstable and that they are justified in proceeding with reclaiming their assets through foreclosure.

Once the foreclosure proceedings have begun, the homeowner is informed in writing by the lender that they are currently in default. The homeowner is able to avoid foreclosure if they are able to make their overdue payments and also pending payments once the notice of default is recorded. However, homeowners only have a limited amount of time to avoid foreclosure. This is because, lenders have two option in recouping their investment: selling the mortgaged property at a trustee's sale or selling the mortgaged property at a public auction after gaining judicial foreclosure.

For the homeowner, foreclosures have negative consequences to their credit history. Additionally, the homeowner may soon find that they are caught in a situation where they are homeless as foreclosures can have immediate effect. This is because the mortgaged property, once and if sold, allows the successful bidder to taking possession of the property immediately.