The foreclosure process is complicated by state laws and specific lender terms. Borrowers in fear of foreclosure should familiarize themselves with the foreclosure process in the state they reside in. Some state laws require the bank, or lender, to send the borrower a notice of sale when a pending foreclosure sale is scheduled. The sale date listed on the notice is the date that the county sheriff or trustee for the lender has scheduled an auction to sell the property.
The sale date of a foreclosure is the date on which an auction is scheduled to sell a foreclosed property.
The Foreclosure Process
Banks and mortgage lenders approve mortgage loans under certain conditions. First, the borrowers must meet credit score and income criteria. Second, the borrowers must sign a security document stating that the lender can sell the property if the borrowers default on the terms of the loan agreement. The security document is called a mortgage or deed of trust.
If a borrower fails to make monthly payments for a period of time, usually 60 to 90 days, the lender will review the terms of the security document and initiate the foreclosure process. Each state governs how foreclosures work within its boundaries, and each lender must follow the state guidelines of foreclosure.
Once foreclosure is initiated by the lender, the borrower will be notified and usually has a chance to reach an agreement or pay the lender the amount requested. If the borrower is unable to do either, the lender must sell the property to recoup its loss.
Foreclosure Sale Procedures
Once the foreclosure reaches the sale stage, certain procedures must be followed. These procedures are mainly contingent on state guidelines, however, they follow a few general rules.
Judicial foreclosure sales are often handled by the county sheriff where the property is located. Nonjudicial foreclosure sales are generally run by a trustee appointed by the lender. In either case, it is the sheriff's or trustee's duty to schedule a date and time for the foreclosure sale to take place. At the sale, he will oversee the auction and finalize the sale.
Notice of Sale
Once the information for the sale is determined, the sheriff or trustee must provide the information to various sources. The borrower must be provided with a notice of sale. This notice includes the property information and the amount the lender is requesting to sell the property for. Additionally, this notice must state the date, time and location of the scheduled sale.
Some states require that the borrowers be physically served the notice, but other states only require it to be mailed. The sheriff or trustee is also responsible for advertising the sale, per the state requirements. Commonly, the sale is advertised in the local newspaper. The sale can also be listed in public places such as the courthouse, or on the property itself.
Foreclosure Sale Guidelines by State
Certain states allow for foreclosure sales to be postponed by the borrower, if circumstances allow. These rules vary greatly and postponements are usually granted on a case-by-case basis.
Those wishing to attend foreclosure sales should double-check the sale date and time before the day of the sale to ensure that it is still happening. Additionally, some states provide a redemption period for borrowers to repay the lender after the foreclosure sale occurs. Again, these situations vary by state and should be investigated individually.