Why foreclosures can take so long
On behalf of The Rollins Law Firm posted in Foreclosure on Thursday, October 31, 2013.
Foreclosure can be a confusing and complicated process for homeowners in Mississippi and across the country. Even if someone files bankruptcy, the bank might still be able to foreclose on a residence that was discharged, which can adversely affect the borrower's credit. In turn, that means that the homeowner could then need to wait even longer before asking for another home loan.
People may think that the bank will foreclose on a home as soon as they stop making payments, but that is not always the case. A foreclosure can occur in one of two ways. In a judicial foreclosure, the lender must pursue repossession of the home through the courts. In a non-judicial foreclosure, the lender follows a specific procedure, which varies depending on the state. It does not need court permission to sell the home at an auction. A bank can also take possession of a house through a deed in lieu of foreclosure, where the owner signs over the property to the lien holder. The owner thus avoids the foreclosure process with a less harsh impact on credit scoring.
The lien holder must pursue repossession of the home through these methods even if the owner has filed for bankruptcy. Lenders vary as to how long they wait to start the foreclosure process. On a positive note, homeowners can continue to live in their homes and save money for another residence while they are waiting for the foreclosure to go through. While people might not be sure when the bank will actually foreclose on their home, an attorney may be able to explain to them the nature of the foreclosure process and its relationship to bank.