One of the biggest fears of any homeowner is foreclosure. No homeowner wants to lose their home, or even worse, become tainted with a bad credit history.

A bad credit history can make it almost impossible to ever be eligible for a home mortgage again. For these reasons and many others, foreclosure is the worst nightmare of homeowners struggling to make ends meet.

But what exactly is foreclosure? Although foreclosure proceedings differ from state to state, there is a general process that is followed by most states. Foreclosure happens when a homeowner fails to make their mortgage payment. In rare cases the foreclosure proceedings can begin with only one payment, but usually there is a grace period for late payments.

After the second missed payment, the homeowner will begin to receive calls from the lender in order to ascertain the situation. However, at this point it is still possible to pay back missed payments, usually with a late fee. Three missed payments may make the lender less forgiving. At this point the lender may record a Notice of Default at the county recorder’s office.

This notifies the borrower that the foreclosure proceedings are starting. If nothing is done about the Notice of Default and the loan payments are still not made, then the lender will establish a foreclosure date.

The lender has the option to begin the foreclosure process in two ways: judicial sale and power of sale. Judicial sale requires the foreclosure process to go through the court system. The court will send a letter demanding payment and the borrower typically has 30 days to make it right.

If payments are not met then a judgment may be entered and the lender can request the property to be sold through auction, which is carried out by the sheriff’s department.

In a power of sale proceeding, the lender will send the borrower notice of foreclosure. After the established waiting period a deed of trust is drawn up. The trustee will then have the power to sell the property at auction for the lender.

Whatever process is chosen, the borrower is given plenty of notice and warning throughout the process, and in most cases, the borrower is given every opportunity to pay back the loan payments with a late fee. However, if the money just isn’t there, foreclosure may become inevitable.

In some cases, the lender may buy back the house and attempt to sell the property through the real estate market instead of through auction. However, avoiding foreclosure altogether is always the preferable method for any borrower.

DTR Realty Service Inc (http://www.dtrrealty.com/) Utah Foreclosure happens when a homeowner fails to make their mortgage payment.

Distributed by Content Crooner