Real Estate Term of the Day: Foreclosure
FORECLOSURE – a legal process in which mortgage property is sold to pay the loan of the defaulting borrower. Foreclosure laws are based on the statues of each state (HUD)
Mortgage payments are typically due on the first day of each month (with a 15 day grace period). On the 16th day, the loan is DELINQUENT. The pre-foreclosure period starts when the mortgage payment is 30 days late. This is defined as a DEFAULT. If the borrower does not bring the loan current a Notice of Default will be sent. Due to the different types of loans the start of the actual foreclosure process varies once the loan is in default.
The Notice of Election & Demand (NED) is the official start of the foreclosure process. When the Public Trustee receives the foreclosure documents from the lender’s attorneys, the Public Trustee will record the NED and will schedule a public auction of the property 110-125 days in the future. The borrower’s RIGHT TO CURE the loan is dependent upon borrower filing an INTENT TO CURE form with the Public Trustee’s office for the appropriate county at least 15 days before the public auction of the property.
RELATED ARTICLES: Colorado Foreclosure Process and Time Frames
FORECLOSURE SALE – the public sale of a mortgage property following foreclosure of the loan secured by that property. Proceeds of the sale are used to satisfy the claims of the mortgagee primarily, with any excess going to the mortgagor (Barron’s Dictionary of Real Estate Terms)