If you find yourself in the unfortunate situation of receiving a Notice of Default from your lender, do not procrastinate in dealing with the problem, even if you cannot afford to bring payments up to term. Immediately contact you lender to work out a solution. If your financial problem is temporary, most lenders can work out a plan to keep from foreclosure. If you and your lender cannot come to terms, contact a mortgage professional for other solutions. A knowledgeable mortgage professional usually know of several foreclosure bailout loan sources.
One of the very first steps of the foreclosure process is the recording of a Notice of Default or NOD. The NOD is recorded against the property in the same manner as a lien or mortgage.
If your home does go into foreclosure you can still refinance your mortgage and save your home from being sold. However you must usually have at minimum 30% equity in your home to be "bailed" out of a foreclosure.
If you do go into default it is important to keep the lines of communication between yourself and the lender open. Lack of communication can cause the repossession process to speed up as well as incur even more costs.
When you default on your mortgage the lender will reposes your property and sell it. You are responsible for the difference between what you owe and what the lender sells the property for.
Failure to meet legal obligations of a contract such as the failure to make the monthly mortgage payment or the failure to pay property taxes when due or maintain hazard insurance on the property.
Failure to meet with the conditions of any agreement. In real estate, commonly used in reference to a mortgage obligation, and the failure to comply with the terms of the Promissory Note. A majority of the time this is due to a failure to make payments, but there are times that a default is a failure to pay real estate taxes.
An increasing cause of foreclosure is the violation of the due on sale clause. This results from selling the property and not having the lenderís approval to do so. For example if you did a contract for deed and did not get approval from the lender. Foreclosures in this case is rare but investors that do a lot of these types of transactions are running into this. Also a lease option is considered a sale.
If you are in default for an extended amount of time you will eventually go into foreclosure.
Lenders are not in the business of home acquisition, it is a large expense for the lender to put your home up for auction. For this reason most lenders will work with you to keep you out of foreclosure.